Cane price arrears fall to Rs2,700 cr from Rs21,000 cr

The amounts that sugar mills owe to sugarcane farmers for the 2014-15 sugar season stood at Rs2,700 crore as of 12 January 2016, down from Rs21,000 crore at the height of the crushing season. This is also much below the arrears in the corresponding period in last sugar season, says a government release.

The measures taken by the government to improve liquidity of the sugar mills have enabled sugar mills to clear cane price dues of farmers, says the release.

Sustained surpluses of production over domestic consumption in the last five years have led to subdued sugar prices, leading to build up of cane price arrears. During sugar season 2014-15, the peak cane price arrears were Rs21,000 crore as of 15 April 2015.

To mitigate the situation and protect livelihoods of cane farmers, the central government has, in the last one year, taken several measures to improve liquidity position of sugar mills, enabling them to clear cane price dues of farmers.

The government provided incentive on raw sugar export, extended financial assistance in the form of soft loan, fixed remunerative price for and waived off excise duty on ethanol supplied under Ethanol Blending Programme (EBP) and more recently a production subsidy to sugar mills to offset cost of cane and facilitate timely payment of cane price dues.

It may be noted that the sugar industry is now active in the ethanol blending programme, by supplying 68.2 million litres of ethanol to oil marketing companies during the current sugar season (since October 2015) as against mere 19.2 million litres supplied during the corresponding period in the last season.

Furthermore, the contracted quantity under EBP is at an unprecedented 1,200 million litres in the current season, which is a historic high, the release adds.