Sugar mills across India owe Rs 18,958 crore to cane farmers

Sugarcane arrears to farmers touched nearly Rs 19,000 crore as on June 18 of the ongoing marketing year ending September with maximum amount owed by sugar mills in Uttar Pradesh, according to the government data.

Mills in Uttar Pradesh owe the maximum amount at Rs 11,082 crore, followed by Karnataka (Rs 1,704 crore) and Maharashtra (Rs 1,338 crore).

Punjab millers are yet to pay Rs 989 crore to sugarcane farmers, while those in Gujarat and Bihar have an outstanding of Rs 965 crore and Rs 923 crore, respectively, official data showed.

“Payment of cane price to sugarcane growing 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,” Food Minister Ram Vilas Paswan said in a written reply to the Rajya Sabha.

According to the data, the total dues of sugarcane farmers as on June 18 of the ongoing 2018-19 marketing year (October-September) stood at Rs 18,958 crore.

Paswan highlighted that a number of steps have been taken in the last one year to boost the liquidity position of sugar mills so that they could clear their cane arrears. According to industry body ISMA (Indian Sugar Mills Association), the country’s sugar output during the 2017-18 marketing year was a record 32.5 million tonnes. In 2018-19, it estimates the production to surpass the last year’s level.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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