The central government has decided to offer loans at 4% interest rate to sugarcane farmers through sugar mills to help them purchase quality seeds, fertilizers and pesticides.

The decision has been taken due to the shortfall of sugar and to improve cane yields.

According to sources, the loans would be paid out by the Food Ministry from the Sugar Development Fund (SDF). The loans would be given to sugar factories till December 31, 2009 and then they will pass on the loans to farmers till March 31, 2010.

Under the plan, sugar factories have to refund the loan along with interest from the date of disbursement, in four equal annual instalments, 

This scheme would also benefit growers in Maharashtra as polls are going to be held in 2-3 months.