Sugar mills pay 92% dues to cane farmers; owe Rs 4,225 cr

Sugar mills have paid Rs 48,675 crore to sugarcane farmers and owe about Rs 4,225 crore for the current marketing year ending September, the government said.

Of the total cane arrears, the maximum amount pertains to Uttar Pradesh at Rs 1,975 crore.

The cane price payable and arrears have been calculated on the basis of Fair and Remunerative Price (FRP), which is the minimum price, fixed by the Centre, to be paid to farmers. For the 2015-16 marketing year, FRP for sugarcane has been fixed at Rs 230 per quintal.

"During the current sugar Season 2015-16, about 230 million tonnes of sugarcane was procured from the farmers by the sugar mills across the country.

"Out of the total cane price dues payable of Rs 52,900 crore, on the basis of Fair and Remunerative Price (FRP), only Rs 4,225 crore are pending as cane price arrears for current sugar season," the Food Ministry said in a statement.

Sugar mills have paid about 92 percent of their cane dues so far, it added.

"Out of the total pending cane price arrears for current sugar season, about Rs 1,975 crore pertains to Uttar Pradesh which is about 14 percent of its dues payable," the statement said, adding that a major portion of the pending arrears about Rs 1,600 crore belongs to five sugar group companies namely, Bajaj, Mawana, Modi, Simbhaoli and Rana.

Maharashtra being the major sugar producing state has cleared almost 96 percent of sugar cane dues payable and only Rs 5,90 crore are pending as arrears.

Other major sugar producing state like Karnataka have also paid 94 percent dues to farmers.

During the sugar season 2014-15, the cane price arrears had peaked at Rs 21,800 crore in April last year and this has now come down to just Rs 684 crore.

"Central government has been consistently monitoring the position of cane price arrear and advising the state governments for speedy liquidation of arrears," the ministry said.

Sugar production of India, the world's second largest producer after Brazil, is estimated to decline to 25 million tonnes in the 2015-16 marketing year, as against 28.3 million tonnes in the previous year. The annual domestic demand is pegged at 26 million tonnes.

For the next 2016-17 marketing year, the government has forecast further decline in output at 23-24 million tonnes, although it has maintained that there would be no shortage as the country would have 30-31 million tonnes of sugar supply taking into account the carry-over stocks.