Stating that sugarcane farmers are facing a "very bad" situation with arrears crossing Rs 19,000 crore, the Centre today called two separate meetings on April 15-16 with farmers and chief ministers of sugar producing states to resolve the crisis.
Sugar mills are unable to clear the cane arrears to farmers as the ex-factory prices of the sweetener is ruling below the production cost. "Sugarcane farmers situation is very bad. The arrears have touched Rs 19,243 crore so far this year. The Centre has not much role to play after the decontrol of the sugar sector. However, we are concerned about farmers," Food Minister Ram Vilas Paswan told reporters here.
A meeting with cane growers will be held first on April 15, followed by a meeting with state chief ministers on April 16, he added. "The issue will be discussed in length with state chief ministers and try to resolve the matter," Paswan said. Of the total cane arrears so far in the 2014-15 marketing year, the maximum Rs 9,715 crore belongs to mills in Uttar Pradesh, followed by Rs 2,864 crore in Maharashtra, Rs 2,402 crore in Karnataka, Rs 682 crore in Punjab, Rs 656 crore in Tamil Nadu, according to official data.
The marketing year runs from October to September. Sugar industry has been facing problems in paying dues to farmers as millers have been incurring losses for last few years on account of mismatch in the cost of production and sale price of the sweetener. The Centre has recently provided a subsidy of Rs 4,000 per tonne for the exports of 1.4 million tonnes of raw sugars to improve the cash-flow of the millers.
Industry body ISMA has been demanding that the government should give exports subsidy on white sweetener, create buffer stock of 2 million tonnes and also restructure millers' debt of over Rs 36,000 crore.
"Cane price arrears across the country have reached an all-time record level of Rs 17,000 crore and with the depressed ex-mill prices of Rs 2,100-2,200 per quintal in western & southern states and Rs 2,300-2,400 per quintal in northern states, mills are not able to generate funds to pay even the fair and remunerative price (FRP) to the sugarcane farmers," ISMA had said last week.
Sugar production of India, the world's second largest producer, has increased by 13 per cent to 24.72 million tonnes in the first six months of 2014-15 marketing year ending September as against 21.87 million tonnes in the corresponding period of 2013-14 marketing year.
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