Rise in sugarcane arrears slows

Mills in west UP have higher dues

Dues to cane farmers have stopped ballooning, although the sugar industry is not yet out of a crisis.

Nationwide cane arrears of Rs 21,836.95 crore on April 15 this year were 36.86 per cent of the total amount payable. This had climbed from Rs 18,364.04 crore on April 15, 2014, 35.42 per cent of the total amount payable. On April 15, 2013, cane arrears of Rs 11,989.67 crore were 21.18 per cent of the total amount payable, according to the department of food and consumer affairs.

The surge during 2013-14 has been arrested in the 2014-15 season that ends in September. The bulk of sugarcane crushing ends by the middle of April.

Cane arrears vary widely within a state reflecting crushing efficiency because the farmers' price is uniform. On April 15, the ratio of dues was 64.29 per cent in western Uttar Pradesh, 48.85 per cent in central Uttar Pradesh, and 45.39 per cent in eastern Uttar Pradesh. Central Maharashtra had lower arrears at 16.65 per cent, but dues in south and north Maharashtra were 22.18 and 24.37 per cent, respectively.

"According to our estimate, total sugarcane dues were Rs 13,100 crore till March 31, 2014. How did the figure reach over Rs 18,000 crore by April 15, 2014, when most mills had stopped crushing?" Abinash Verma, director-general of the Indian Sugar Mills Association (ISMA), told Business Standard.

Last month, the Centre raised the import duty on sugar from 25 to 40 per cent and removed excise duty on production of ethanol, a key byproduct. It also provided a subsidy of Rs 4,000 a tonne in February on export of 1.4 million tonnes of raw sugar.

"In Uttar Pradesh, cane dues till April are almost the same as last year. But arrears have been added in Gujarat, Maharashtra and Karnataka," said Sudhir Panwar, member of the Uttar Pradesh Planning Commission and president of the Kisan Jagriti Manch.

On the intrastate variation in dues, Panwar said some mills in western Uttar Pradesh were habitual defaulters, while those in the central and eastern parts of the state were better managed.