Ministry of Consumer Affairs, Food & Public Distribution | Status on payment to Sugarcane Growers

PIB News Update:Minister of State for Ministry of Consumer Affairs, Food & Public Distribution, Shri   Danve  Raosaheb  Dadarao has informed that As per information received from Government of Uttar Pradesh, total amount of cane dues outstanding and paid to sugarcane-growing farmers in Uttar Pradesh by State-owned, cooperative and private sugar mills for purchasing of sugarcane in the last three sugar seasons are at Annexure.

Payment of cane price to sugarcane growing farmers by the sugar mills is a continuous process. However, on account of surplus sugar production during sugar seasons 2017-18 and 2018-19 the sugar prices remained depressed which adversely affected the liquidity of the sugar mills resulting in accumulation of cane price arrears of the farmers.

With a view to improve the liquidity position of sugar mills of the country including State of Uttar Pradesh,  enabling them to clear  cane price arrears of farmers, the Government took following measures, in sugar seasons 2017-18 & 2018-19:

1. Fixing a Minimum Selling Price (MSP) of sugar w.e.f 07.06.2018 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. w.e.f. 14^th February, 2019.
2. Extending Assistance to sugar mills to offset the cost of cane in sugar seasons 2017-18 and 2018-19.
3. Extending assistance to sugar mills by reimbursing carrying cost towards maintenance of buffer stock of 30 LMT of sugar.
4.             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 sugar season 2018-19.
5. Extending soft loans to sugar mills through banks for which Government would bear interest subvention @ 7% for one year to clear cane price arrears.
6. Allowed production of ethanol from B-heavy molasses and sugarcane juice; and fixed remunerative price of ethanol for supply to Oil Marketing Companies (OMCs) in ethanol season 2018-19.
7. Extending assistance to sugar mills for augmentation of ethanol production capacity

Further,  in view of huge carry over-stock and estimation of surplus production than the estimated consumption in the country in current sugar season 2019-20, the Government has taken following measures to improve liquidity of sugar mills enabling them to clear cane dues of farmers for sugar season 2019-2020:-

1. Created buffer stock of 40 LMT of sugar for a period of one year from 01.8.2019 to 31.7.2020 for which Government would be reimbursing carrying cost of about Rs.1674 crore towards maintenance of buffer stock.
2. Extending assistance to sugar mills to facilitate export of 60 LMT of sugar from the country in sugar season 2019-20, for which an estimated expenditure of Rs 6268 crore would be borne by the Government.

(iii) The Government has also allowed production of ethanol from sugar and sugar syrup; and has fixed the remunerative ex-mill price of ethanol derived from C-heavy molasses, B-heavy molasses and sugarcane juice/ sugar/ sugar syrup.

Further, Government of Uttar Pradesh has provided financial assistance of Rs. 483.93 crore to sugar mills in sugar season 2017-18 for payment of their cane dues. In sugar season 2018-19 also, soft loan of Rs. 2864 crore was extended to sugar mills of Uttar Pradesh under soft loan scheme announced by State Government for clearance  of cane dues of farmers.