The Centre has decided to offer loans to sugarcane farmers at 4% interest through sugar mills to aid them buy quality seeds, pesticides and fertilizers.

India's sugar production is nailed at as low as 160 lakh tonnes, as the country's domestic consumption of sugar is about 230 lakh tonnes, implicating vast imports of both ready-to-eat sugar and raw and white sugar.

Food Ministry would give these loans from the Sugar Development Fund (SDF). The loans would be paid out to sugar mills by the end of 2009. The sugar factories, successively, will give the lower interest rate benefit to sugarcane farmers in their region by March 2010.

The government expects the sugar factories to pay back the loan along with interest in 4 years and in 4 equal yearly installments.

This scheme would also benefit farmers of Maharashtra, as it is the largest sugar producing state prevailed by cooperatives and moreover, polls are also going to take place in upcoming 2-3 months.