Govt could consider white sugar export incentive: Paswan

But says needs assurance that mills will clear cane arrears to farmers

The government could consider giving cash-strapped sugar companies an incentive to export white, or refined, sugar as long as mills agree to pay dues they owe to millions of cane growers, Food Minister Ram Vilas Paswan said on Wednesday.

"The government is willing to consider the demand of the industry so that mills' financials do not worsen, but we need an assurance that cane arrears to farmers are cleared as early as possible," Paswan told Reuters.

Five straight years of surplus output has hammered local sugar prices, hitting mills' financial health to an extent that they now owe more than $3 billion to cane growers.

Mills also complain that higher government-set cane prices have destroyed their profit margins.

"We have to strike a balance to protect farmers' interests and ensure that cane crushing remains viable for mills. I'll separately talk to farmers and mills to ensure that," Paswan said.

Sugar companies owe Rs 19,200 crore ($3.1 billion) to cane growers, with the top two producing states of Maharashtra and Uttar Pradesh accounting for more than three-fifths of the total arrears.

($1 = 62.30 rupees)