The Hindu Business Line : Dues to sugarcane growers top Rs 3,900 crore

Mumbai, April 29 A total of over Rs 3,900 crore is the amount outstanding from sugar mills as arrears for sugarcane procured from growers as of January 15 this year, the Government stated in Parliament recently.

The dues cover the sugar season till 2007-08.

The share of the private sector mills is the largest at Rs 2,321 crore representing close to 60 per cent of the total arrears of Rs 3,922.15 crore, while the co-operative sector with arrears of Rs 1,474.15 crore accounts for slightly less than 40 per cent.

The rest is owed by the public sector.

Usually, the private sector’s cane arrears would be higher than that of co-operatives.

But in the current sugar season 2007-08, the cane arrears of co-operatives (Rs 1251.39) are higher than that of the private mills (Rs 1138.23).

Buffer stock

Disclosing details of outstanding payment of sugarcane dues, the Minister of State for Agriculture as well as for Consumer Affairs, Food and Public Distribution, Mr Akhilesh Prasad Singh, stated in the Rajya Sabha that the buffer stock created by the Government was aimed at enhancing the liquidity of sugar mills affected by decline in sugar prices and stock value.

The buffer stock creation involved an annual subsidy of Rs 880 crore from the Sugar Development Fund and there is an additional bank credit of about Rs 978 crore. Improved liquidity would help clear cane price arrears as first priority, he said.

The payment of cane arrears and announcement of State Advised Price (SAP) by the State governments over and above the Statutory Minimum Price (SMP) for cane announced by the Union Government continues to be a subject of litigation in courts.

Falling prices

It is also believed that falling sugar prices constrained the capacity of sugar mills to pay cane price to growers in time. Due to high level of sugar production during the last season 2006-07 and initial estimate of high production during the current season 2007-08, sugar prices had declined considerably.

No report of farmers giving up sugarcane cultivation as a result of hardship faced by them due to pending dues has been received, the Government stated in response to concerns that area under sugarcane may shrink.

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