Paswan asks states to ensure mills clear cane arrears to farmers

States should issue strict directions to sugar mills to clear their dues to sugarcane farmers and consider taking action against defaulting factory owners, Food Minister Ram Vilas Paswan said today while expressing concern over rising arrears which have reached Rs 15,000 crore.

Paswan has written a letter to the chief ministers of all sugar producing states on this issue.

"...the arrears for the current sugar season (2017-18) for all the sugar mills have risen considerably. This is a matter of serious concern for all of us.

"I, therefore, seek your intervention to issue strict directions to all sugar mills for immediately clearing of cane price arrears of sugar season 2017-18 and those of earlier years. You may also consider taking necessary action against the defaulter sugar mills where warranted," he said in the letter.

Paswan has written to chief ministers of Andhra Pradesh, Madhya Pradesh, Bihar, Odisha, Chhattisgarh, Punjab, Gujarat, Puducherry, Goa, Tamil Nadu, Haryana, Telangana, Karnataka, Uttar Pradesh, Maharashtra and Uttarakhand.

Sugar mills owed Rs 13,899 crore to sugarcane growers as of March 21 of the current marketing year ending September.

Mills in Uttar Pradesh had maximum cane price arrear at Rs 5,136 crore, followed by Karnataka - Rs 2,539 crore and Maharasthra - Rs 2,348 crore, as per the government data place in Parliament.

However, a senior food ministry official said that the cane arrears have now reached around Rs 15,000 crore.

Sugar output in India, the world's second largest producer after Brazil, is estimated to rise at record 29.5 million tonnes in the ongoing 2017-18 marketing year (October-September) from 20.3 million tonnes in the previous year, according to industry body ISMA. The annual domestic demand is estimated at 25 million tonnes.

Surplus production has resulted in fall in prices of the sweetener in the domestic market, thereby affecting the cash-flows of millers and their capacity to make payment to sugarcane farmers.

To check sliding prices, the Centre has doubled import duty on sugar to 100 per cent and removed export duty. It has also ordered mills to export 2 million tonnes of sugar.