The sugar mills in the country owe Rs 2,400 crore to sugarcane farmers from the last two sugarcane crushing seasons. Out of this, Rs 2,300 crore is outstanding from 2018-19, while Rs 100 crore is for 2017-18.
These arrears have affected the liquidity of the sugar mills. As per a senior food ministry official, until January, the sugar mills have paid Rs 84,700 crore for the sugar session of 2018-19 (October-September) and Rs 84,900 crore for 2017-18.
Now, the sugar mills owe Rs 2,300 crore for the year 2018-19 and Rs 100 crore for the year 2017-18. According to the Ministry of Food, arrears of Rs 87,000 crore for 2018-19 and Rs 85,000 crore for 2017-18 session had to be paid by February 2020.
The official further informed that the government has taken numerous steps to improve the liquidity of the sugar mills in the country. The government took several measures in the sugar sessions of 2017-18 and 2018-19. Rs 1,574 crore has also been paid to sugar mills through several schemes and aids.
As per the government orders, the farmers should be paid within 14 days. Under the Sugarcane Control Order, 1966, sugar mills are required to pay the sugarcane farmers within 14 days of its supply, failing which they also have to pay 15 per cent annual interest on late payments.
On Tuesday, February 25, the central government extended the deadline for export of sugar, allocated during the last session of the year 2018-19, by the sugar mills, from February 15 to March 14. The Ministry of Food has also issued an order in this regard. According to official statistics, 38 lakh tonnes of sugar has already been exported under the scheme.
Uttar Pradesh has the highest outstanding dues this season
For the crushing season 2019-20, Uttar Pradesh has the highest outstanding dues towards farmers worth Rs 7,392 crore. The state government had also promised the payment to sugarcane farmers of the state to be made within 14 days.
According to a report received from the Uttar Pradesh Sugar Mill Association, the farmers’ arrears on sugar mills in the state have gone up to Rs 7,392.47 crore in the current crushing season 2019-20, from October 1 to February 20, 2020, while Rs 515.55 crore for crushing season 2018-19, Rs 40.45 crore for crushing season 2017-18 and Rs 22.29 crore for crushing season 2016-17 are outstanding on sugar mills.
In the current crushing season, crushing is going on in 119 sugar mills in Uttar Pradesh, while crushing was going on in 117 sugar mills at the same time, last year. The production of sugar in the state has increased to 54.85 lakh tonnes in this crushing season from last year’s 53.36 lakh tonnes. The average recovery in sugarcane this season is 10.89 per cent, while the average recovery in crushing season 2018-19 was 11.07 per cent.
Uttar Pradesh leads the country in terms of sugar production. More than 35 lakh farming households in the state are involved in sugarcane cultivation. Sugarcane was cultivated in 26.79 lakh hectare area in 2019-20 and 117 sugar mills are operating in the current crushing session in the state. The sugar industry in the state is worth about Rs 40,000 crore. Uttar Pradesh’s sugar production in 2018-19 was about 1.18 million tonnes, which is a little over 1.2 million tonnes in 2017-18. India’s sugar production is projected to fall by about 14 per cent to around 2.8 crore in 2019-20, compared to 3.3 million tonnes in the current sugar season 2018-19.
Maharashtra owes over Rs 415 crore
Apart from Uttar Pradesh, farmers’ money is also stuck in sugar mills of Maharashtra. According to a report by the Maharashtra Sugar Commissionerate, the mills have procured Rs 534.80 crore of sugarcane from farmers in the current crushing season until December 15, 2019, out of which only Rs 111.55 crore was paid. Thus, the arrears of sugarcane farmers on sugar mills have reached Rs 415.24 crore.
