No Place for Sugarcane Growers in Upcoming Agri-Package

The government is set to announce a big relief package for the distressed farmers in the country but the sugarcane growers, who have pending arrears of around Rs 19000 crore are expected to be left out as a fallout of the row between the government and millers.

According to an official close to the development, the sugar industry has been told categorically that no package for sugarcane sector can be expected now as the Cabinet had provided a package worth Rs 5,500 crore in September 2018, to support the sugar sector by balancing cost of cane and facilitating export of sugar from India.

The official told media that "Cabinet has offered all possible help to the sector. We cannot intervene again so that millers can make profits. Our motive is restricted to help the industry to clear dues to the farmers". He added as there is no proposal for any package from the Food Ministry, the Prime Minister Office may take a different view of the matter considering the forthcoming general elections.

It must be noted that sugarcane is closely associated with the politics of Uttar Pradesh and Maharashtra.

In June 2018, the Modi government had announced sops for the sugar industry, days after the party lost by-poll in the Kairana Lok Sabha constituency, the sugar belt in western Uttar Pradesh.

Moreover, in the past two months, the millers have made numerous demands to the government for support in terms of bridge loan and hike in Minimum Selling Price to improve cash liquidity to allow them to release cane payments.

The NCP chief and de facto sugar head in Maharashtra Sharad Pawar last month, wrote to PM Modi asking government's intervention for the release of collateral sugar seized with the public sector banks to increase exports which were stuck because of the difference in subsidy payment.

Meanwhile parliamentarian and farmer leader Raju Shetti urged why the government did not increase the MSP when the Fair and Remunerative Price - price paid by millers to growers for cane - increased by Rs 20 -275 a quintal this year. He said, "The present government is not serious. I am myself a farmer and farmers in the country are in distress. I can see how the Centre is trying to create a rift between farmers and millers”.

Food Ministry Officials are also questioning as to why the millers failed to export 7 million tonnes under Minimum Indicative Export Quota with the Centre compensating the expenses towards internal transport, goods, handling and other charges. 

National Federation of Cooperative Sugar Factories (NFCSF) and Indian Sugar Mills Association (ISMA) have claimed that the ex-mill cost of sugar is over Rs 34 / kg but the Minimum Selling Price is Rs 29 / kg and they want the MSP to be hiked to Rs 34 / kg.

A person related to one of these bodies told the drop in the crude oil prices had led to the drop in ethanol demand, which had forced the industry in Brazil to move focus back on the sugar production. He said it had led sugar costs in the global market to drop to 12 cents / pound, making it hard for the domestic millers to contend in the global market.

So as to help millers clear farmers' dues, the Centre has also decided to offer financial assistance to sugar mills at the rate of Rs 13.88 / quintal of cane crushed in 2018-19 season to counterbalance the cost of cane. But, the millers found it ‘inadequate’.