98 percent of Sugarcane Arrears to Farmers is Cleared, Says Government

Following various initiatives implemented by the Union government, total arrears to sugarcane farmers have decreased to approximately ₹5,000 crore, with nearly 98 percent of the dues for the last five seasons being cleared by the mills, the Rajya Sabha was informed today. 

Sugarcane dues to farmers, according to Union Minister of State for Consumer Affairs, Food and Public Distribution Sadhvi Niranjan Jyoti, were ₹65 crore in 2016-17, ₹135 crore in 2017-18, ₹365 crore in 2018-19, 130 crore in 2019-20, and ₹4,445 crore in 2020-21 (as on December 6). 

She stated that the payment of cane price to sugarcane growing farmers by sugar mills is a continuous process, and that the cane price payable to sugarcane farmers on an all-India basis was ₹55,340 crore in the 2016-17 season, ₹83,629 crore in 2017-18, ₹86,617 crore in 2018-19, ₹75,907 crore in 2019-20, and ₹92,881 crore in 2020-21. 

Payments to sugarcane farmers, which total ₹5,140 crore, have been made on time. According to the minister, the arrears are minimal and decreasing. 

The Minister added that different interventions have been taken from time to time by the Centre to facilitate the quick clearing of cane dues of farmers by sugar mills. Excess sugar was diverted to ethanol, sugar mills were given financial assistance to offset the cost of cane, a minimum selling price for sugar was set, sugar mills were given financial assistance to maintain buffer stocks, financial assistance to facilitate sugar exports, and sugar mills were given soft loans. 

"Over the last five years, more than 98% of sugarcane dues payable have been paid as a result of these initiatives," the minister added. 

Due to the late retreat of the monsoon, cane crushing began late in some states during the current sugar season, which began on October 1, she added. 

The current level of arrears is down from over ₹22,000 crore dues owed in June of last year. The late Union Minister of Food, Ram Vilas Paswan, then instructed mills to clear them as soon as possible. 

The huge drop in arrears is also indicative of a healthy sugar sector. Sugar exports totaled 13.05 million tonnes (mt) over the last two seasons, with a record 7.1 mt exported overseas last year. 

Sugar exports were aided by a financial assistance package from the Centre worth ₹10,000 crore in both seasons (₹6,500 crore in 2019-20 and the remainder last season). This season, Indian exporters have inked agreements to export 3.3 million tonnes of sugar without the help of the government, as world prices have risen due to a lack of supply and low production. 

Furthermore, the Centre has urged sugar mills to invest in ethanol manufacturing, with at least three lakh tonnes of sugar being converted. Sugar mills earned ₹35,000 crore from ethanol sales during the last four seasons, the government told the Lok Sabha earlier this week. 

These actions have provided much-needed cash to the industry, resulting in the clearing of sugarcane arrears. The reduction in arrears is also politically significant for Uttar Pradesh's ruling Bharatiya Janata Party, the country's largest sugar producer.