Sugar Price: Cane arrears decline to Rs 15,222 cr so far in 2018-19: Ram Vilas Paswan


Cane dues to be paid by sugar mills to farmers has come down to Rs 15,222 crore so far in marketing year 2018-19, that will end in September, because of government’s intervention, Parliament was informed on Tuesday. Depressed sugar prices due to surplus sugar production in sugar seasons 2017-18 and 2018-19 adversely affected the liquidity of sugar mills resulting in accumulation of cane price arrears of the farmers.

The cane arrear of the 2017-18 marketing year has also come down to Rs 285 crore, Food Minister Ram Vilas Paswan said in a written reply in the Lok Sabha.

Total cane dues were at Rs 85,179 crore and Rs 85,546 crore during the 2017-18 and 2018-19 marketing years (October-September), respectively, he added.


“As a result of various measures taken by the government, cane dues of farmers for 2017-18 and 2018-19 have been reduced to Rs 285 crore and Rs 15,222 crore, respectively as on July 17, 2019,” Paswan said.

Payment of cane price to sugarcane growing farmers by the sugar mills is a continuous process, he said.

In a bid to improve the liquidity position of sugar mills in the country and enabling them to clear cane price dues of farmers, the government has taken several measures in 2017-18 and 2018-19 marketing years, he said.

Among steps taken, the government since June 2018 had fixed a Minimum Selling Price (MSP) of sugar at Rs 29/kg for sale at factory gate in domestic market, below which no sugar mill can sell sugar.

MSP has further been increased to Rs 31/kg with effect from February 14, 2019.

The government has extended assistance to sugar mills to offset the cost of cane for the 2017-18 and 2018-19 marketing years and reimbursing carrying cost towards maintenance of buffer stock of 30 lakh tonnes of sugar.

Besides, the government is also extending assistance to sugar mills for defraying expenditure towards internal transport, freight, handling and other charges to facilitate export of sugar from the country in 2018-19, Paswan said.

Also, the government provides soft loans to sugar mills through banks and bears interest subvention at 7 per cent for one year to clear cane price arrears.

Under the Sugarcane (Control) Order 1966, sugar mills are required to make cane price payment to farmers within 14 days of supply of cane. If mills fail to make payment, then they have to pay interest at the rate of 15 per cent per annum on amount due for the delayed period beyond 14 days.

The state governments have powers to enforce the Order with regard to payment of cane dues of farmers. The Central government from time to time issues advisory to the state governments for ensuring clearance of cane price arrears of farmers and to take action against defaulting mills, the minister added.

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