Dues to cane farmers may have crossed Rs 20,000 crore: ISMA
New Delhi:A continuous fall in wholesale sugar prices due to record production has rendered sugar mills defaulting on payments to farmers, and total dues to cane growers is likely to have crossed Rs 20,000 crore by now, industry lobby Indian Sugar Mills Association (ISMA) said on Tuesday.
According to the food ministry, till 12 April, mills across different states owed farmers Rs18,044 crore. While mills in Uttar Pradesh owed farmers Rs 8,869 crores, the dues were Rs 2,420 crore in Karnataka and Rs 2,213 crore in Maharashtra.
Payment to cane growers is considered ‘due’ when it is delayed by more than 14 days after supplying raw cane to a mill. Piling up dues to farmers is likely to impact farm incomes which has been hit by falling prices of pulses, oilseeds and vegetables over the past year.
According to ISMA, mills have so far produced close to 29.98 million tonnes of sugar in the 2017-18 crushing season (October 2017 to September 2018), a record production, surpassing the previous high of 28.4 million tonnes produced in 2006-17 and 28.3 million tonnes in 2013-14.
“Since 227 sugar mills are still crushing sugarcane, there will be a further addition to the stocks which will only increase the surplus sugar availability over and above the domestic requirement,” ISMA said in a statement.
India’s domestic production already exceeds consumption by a staggering 5 million tonnes. According to ISMA, in the past five months, wholesale sugar prices have fallen by about Rs 9 per kg, and mills are incurring a loss of Rs 8 per kg of sugar sold.
Mills are unable to pay farmers according to the fair and remunerative price (FRP) declared by the centre, ISMA said, urging the government to bear a part of the FRP payable to farmers.
“The centre announced several steps such as mandatory exports for sugar mills but this was unable to arrest the fall in prices,” a senior food ministry official said, requesting not to be quoted.
“Due to depressed global prices, mills have not been able to export any sugar yet,” the official said, adding, “the government is exploring options to resolve the situation.”