Sugar mills paid Rs 41,000 cr to growers in 2010-11 mktg yr

Sugar mills paid nearly Rs 41,000 crore to sugarcane farmers till June 15 of the 2010-11 marketing year, ending this month, while dues of Rs 1,656 crore were outstanding, Parliament was informed today.

"... Out of the total cane price payable of Rs 42,563.9 crore for sugarcane for the sugar season 2010-11, an amount of Rs 40,907.90 crore has been paid up to June 15, leaving a balance of Rs 1,656.01 crore, which is 3.89% of the total cane price payable," Food Minister K V Thomas said in a written reply to the Rajya Sabha.

The sugar marketing year, or season, runs from October to September.

Thomas informed that the arrears owed by mills to sugarcane farmers for previous marketing years stood at about Rs 213 crore.

The minister said it is obligatory on the part of sugar mills to pay sugarcane growers within 14 days of delivery, failing which 15% interest per annum is leviable on the amount.

With the country achieving higher production than domestic demand after two years of shortfall, the government has allowed mills to export sugar in the current marketing year.

"During the current sugar season 2010-11, the government has allowed the export of 2.61 million tonnes of sugar... to augment the liquidity of sugar factories, so as to enable them to settle cane price dues/arrears speedily," Thomas noted.

Sugar production in India, the world's second-largest producer and biggest consumer, is estimated at 24.2 million tonnes in the 2010-11 marketing year, as against 18.8 million tonnes in the previous year.

Annual domestic demand is pegged at 21-21.5 million tonnes. Maharashtra and Uttar Pradesh are the top two sugar producing states in the country.

The Centre has fixed the fair and remunerative price (FRP) of sugarcane -- the floor price below which no sugar factory can purchase sugarcane from farmers -- at Rs 139.12 per quintal for the 2010-11 marketing year.

However, many states, including UP, announce their own sugarcane price, called a State Advisory Price (SAP), which is well-above the Centre's FRP. UP has announced a SAP of Rs 210 per quintal for the current marketing year.