Sugarcane arrears at Rs 16,883 cr as on Jan 31 of 2020-21 marketing year

Sugar mills owe Rs 16,883 crore to cane farmers as on January 31 of the current marketing year that started in October, Parliament was informed on Tuesday.

"Payment of cane price to sugarcane growing farmers by the sugar mills is a continuous process," Food and Consumer Affairs Minister Piyush Goyal said in a written reply to a query in the Rajya Sabha.

In sugar seasons 2017-18, 2018-19 and 2019-20, cane prices payable to sugarcane farmers on an all-lndia basis were Rs 85,179 crore, Rs 86,723 crore and Rs 75,845 crore. respectively.

"As a result of various measures taken by the government...the cane dues of farmers for sugar seasons 2017-18, 2018-19 and 2019-20 have been reduced to Rs 199 crore, Rs 410 crore and Rs 766 crore, respectively, as on January 31, 2021," he said.

The sugarcane dues as on January 31, 2021, for the marketing year 2020-21 (October-September) stood at Rs 16,883 crore.

Sugar mills of Uttar Pradesh owed Rs 7,555.09 crore, followed by Karnataka at Rs 3,585.18 crore and Maharashtra at Rs 2,030.31 crore, the data showed.

"Excess production of sugar than the consumption demand during the past three sugar seasons has resulted in subdued ex-mill prices of sugar, which has adversely affected the liquidity of sugar mills, resulting in accumulation of cane price arrears of farmers.

"To improve liquidity of sugar mills thereby enabling them to clear cane price dues of farmers, the central government has taken various measures during the past three sugar seasons and the current sugar season," Goyal said.

In the current marketing year, the Centre is providing assistance to sugar mills of Rs 6,000 per tonne to facilitate export of 60 lakh tonnes of sugar in 2020-21, costing exchequer Rs 3,500 crore.

"Under the various schemes for the sugar sector, funds are credited to the accounts of farmers on behalf of sugar mills against their cane dues, and the balance if any is credited to the accounts of sugar mills," Goyal said.

The government is encouraging sugar mills to divert excess sugarcane and sugar to ethanol. It has allowed production of ethanol from B-heavy molasses, sugarcane juice, sugar syrup and sugar; and has also been fixing the remunerative ex-mill price of ethanol derived from various feed stocks.

To increase ethanol production capacity in the country, the government is extending an interest subvention of Rs 4,687 crore to sugar mills/distilleries against loans availed by them from banks to set up new distilleries or to expand their existing capacities.

"As the revenues generated from sale of ethanol by sugar mills/ distilleries reach to the accounts of sugar mills in just 3 weeks' time as compared to 12-15 months time taken for realising revenue from sale of sugar, production of ethanol would improve liquidity of sugar mills," the minister said. It will enable them to make timely payment of cane dues of sugarcane farmers, he added.