Centre asks sugar mills to divert excess cane, sugar for ethanol production

In order to encourage mills to divert sugarcane to produce ethanol in the interest of farmers and sugar industry, soft loans of Rs 18,600 crore are being extended through banks to 362 projects

With surplus sugar production and falling market demand pulling down sugar prices and leading to an accumulation of farmers’ arrears, the Centre has asked sugar mills to divert the excess cane and sugar for the production of fuel grade ethanol.

In an advisory to the mills, the Union Ministry of Consumer Affairs, Food and Public Distribution underlined that surplus production was depressing the ex-mill price of sugar, thus adversely affecting sale realisation and cash flow, which contributed to the accumulation of cane arrears.

To improve the liquidity and clear farmers’ dues, the Centre had taken several measures in the 2017-18, 2018-19 and