Government rules out loan waiver to sugar mills

Government Tuesday ruled out any new package or loan waiver to sugar mills although their dues to sugarcane farmers have touched Rs 15,893 crore.

Due to surplus output in the last four years and depressed prices, the liquidity of sugar mills have been "adversely" affected leading to accumulation of cane price arrears of the farmers, Food Minister Ram Vilas Paswan said in a written reply to Lok Sabha.

As on March 5, cane price arrears to farmers reached Rs 15,893.36 crore in over past three years, he said.

Of the total, Rs 13,644 crore is for the ongoing 2015-16 season (October-September), while Rs 1,366 crore is for the 2014-15 season and Rs 882.07 crore for 2013-14 and earlier seasons, he added.

Asked if the government proposes to provide any package to improve the condition of sugar mills and ensure timely payment of cane arrears, Paswan said: "There is no new proposal under consideration of the government to provide any package/ incentive including creation of buffer stocks."

"There is no plan under consideration of the government to waive loan provided to the sugar mills," he added. 

The government has extended financial assistance in the form of soft loan, incentive on raw sugar export and performance-based production subsidy scheme in order to improve the liquidity position of the sugar mills enabling them to make timely payment of sugarcane dues, he said.

The financial assistance provided by the government are utilised to facilitate liquidation of cane price arrears of farmers. This is ensured through submission of utilisation certificate of sugar mills duly verified by the state government, he added.

Sugar production is estimated to be 26 million tonnes for the 2015-16 season, lower than 28.1 million tonnes last year.