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Excess sugar production and depressed domestic sugar prices have led to accumulation of cane price arrears of farmers in key sugarcane growing States including Uttar Pradesh, Maharashtra and Karnataka.
Even as the farmers here have resorted to agitations demanding their dues, the Centre has made it clear that it has limited capacity to help the sugar industry.
Production in the 2017-18 sugar season was about 322 lakh tonnes (lt), which was much higher than the consumption of 255 lt . The production during current season is estimated to be about 315 lt and consumption is seen at 260 lt .
According to information given by the Ministry of Consumer Affairs, Food and Public Distribution to the Lok Sabha, against Minimum Indicative Export Quotas (MIEQ) of 20 lt allocated to sugar mills for 2017-18 sugar season, about 6.20 lt of sugar was exported till September 30.
Similarly, against an MIEQ of 50 lt allocated for sugar season 2018-19, about 2.54 lt have been exported so far.
The Ministry, while admitting to accumulation of cane price arrears of farmers, added that the government has already helped sugar mills to improve their liquidity positions and hence the cane price arrears of farmers on State Advised Price (SAP) basis have reduced from the peaked level of ₹23,232 crore to about ₹3,981 crore. On the basis of Fair and Remunerative Price (FRP), the arrears have come down to ₹1,401 crore from record ₹14,538 crore.
The FRP is the minimum price that sugarcane farmers are legally guaranteed. However, State governments are free to fix their own SAP and millers can offer any price above the FRP.
Union Minister Nitin Gadkari while speaking in Satara ( Maharashtra) said that sugar mills must not approach the Centre for grant to resolve the crisis as the government has already done whatever was possible.
‘Turn to ethanol’
“Sugar mills will survive only if they turn to ethanol production and only then it is possible to pay a fair price to farmers,” he said. The Centre has already allocated export targets for all the sugar mills, extended assistance to offset the cost of cane for sugar season 2017-18 and 2018-19 and created a buffer stock of 30 lt .
However, this has not helped farmers. In Belagavi and Bagalkote districts of Karnataka, sugarcane farmers demanded the cane price payment over and above the FRP for the sugar season 2017-18, while farmers in sugar belt of Western Maharashtra threatedn to protest from January if mills fail to pay the arrears.
“The sugar industry is passing through a tough phase and the government has to intervene. The government must help farmers, if not mills. The situation is going to worsen” said Maharashtra’s former Minister and sugar industry leader Prakash Awade.
Sugar mill representatives from various States have approached the Centre demanding to increase the minimum selling price of sugar from ₹29/kg to ₹34-36/kg.
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