Agri Business

Sugar mills owe ₹15,683 crore to farmers across the country

Our Bureau Bengaluru | Updated on September 16, 2020 Published on September 16, 2020

‘Surplus output, low price hit liquidity of mills, resulting in pile-up of arrears’

Ahead of new crushing season, the sugar mills owe a total of ₹15,683 crore in payments to farmers across the country.

Of this, ₹12,994 crore is due from the current sugar season ending September 2020, while the rest is a pile-up from previous years.

“Of the total cane dues payable of ₹75,585 crore for sugar season 2019-20 as on September 1, about ₹62,591 crore have been paid to the sugarcane farmers and only ₹12,994 crore cane dues are yet to be paid,” Minister of State for Consumer Affairs, Food and Public Distribution, Raosaheb Danve, informed the Parliament in a written reply.

Combination of factors

“The payment of cane price to sugar cane farmers by the sugar mills is a continuous process. However, on account of surplus sugar production during the previous sugar seasons, the sugar prices remained depressed which adversely affected the liquidity of the sugar mills resulting in accumulation of cane price arrears of the farmers,” Danve said.

State-wise dues

Uttar Pradesh, the largest sugar producer, tops the list of total cane dues, followed by Tamil Nadu and Gujarat (see table).

“With a view to improve liquidity of sugar mills enabling them to clear cane price arrears of farmers, the Central government has taken various measures in past three sugar seasons such as extended assistance to sugar mills to facilitate export of sugar, maintain buffer stocks and soft loans through banks to clear cane price dues, fixed minimum selling price,” he said.

Sugar balance sheet

Sugar production for 2019-20 season ending September is estimated at 272 lakh tonnes by the Indian Sugar Mills Association (ISMA).

The opening balance for 2020-21 season starting October 1 is pegged at 115 lakh tonnes, where output is estimated to be higher at around 305 lakh tonnes, after factoring in diversion for ethanol, on increase in acreages.

 

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Published on September 16, 2020
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