Sugar farmers in Fiji are relieved the government has announced it will meet the shortfall in the price for the 2010 cane crushing season.
The Fiji Times reports the government says the move is to instill confidence in farmers and encourage them to increase the crop yield.
But the funding assistance of just over 3 million US dollars will be treated as a loan to the Fiji Sugar Corporation.
After a submission by the Acting Minister for Finance, Joketani Cokanasiga, Cabinet agreed to meet the local shortfall of 3-dollars-13 per tonne of cane.
Meanwhile the FSC said it was unable to guarantee the forecast local price of 52-dollars--20 per tonne of cane to farmers for this 2011 season.
The Sugar Corporation's executive chairman Abdul Khan said the major factor affecting good sugar production was cane supply, which could easily be thwarted by natural disasters or climatic changes.