Cane arrears at Rs 10,000 cr in last two seasons

Ram Vilas Paswan says the policy interventions by govt have shown remarkable progress in reducing arrears

As much as Rs 10,000 crore is due to farmers across the country for sugarcane sold to millers in last two seasons, with highest outstanding in Uttar Pradesh.

Cane arrears to farmers stood at Rs 9,361 crore till early this month for the current 2015-16 season ending September, while Rs 780 crore is outstanding for the previous season, Food Minister Ram Vilas Paswan said.

Briefing media about the government's measures to help cash-starved millers in clearing cane arrears, Paswan said, "Over the past two years, the policy interventions by the government have shown remarkable progress in reducing arrears."

During the 2014-15 season, he said, cane arrears had touched nearly Rs 22,000 crore but after several government interventions have come down to Rs 780 crore of which Rs 191 crore pertains to UP, the country's second largest sugar producing state.

In the current season as well, cane arrears had touched a peak of Rs 14,000 crore and same has come down to Rs 9,361 crore till early this month.

Out of Rs 9,361 crore cane arrears, Uttar Pradesh has a maximum of Rs 2,855 crore for the ongoing 2015-16 season (October-September).

The arrears calculated for UP is based on cane price fixed by the Centre (called Fair and Remunerative Price -- FRP) which is Rs 230 per quintal. If arrears to be calculated based on cane price fixed by the UP government which is Rs 280 per quintal, then dues would be Rs 5,795 crore.

"The state of UP has allowed a two stage payment of FRP. Till end June, mills are expected to pay cane dues based on FRP (Rs 230/quintal), according to which arrears are presently Rs 2,855 crore. However, July onwards the mills will have to pay dues based on State Advised Prices (at Rs 280/quintal) on the basis of which the dues come to Rs 5,795 crore," Paswan said.

Giving data of cane arrears for other states, the minister said millers owed Rs 1,819 crore in Maharashtra and Rs 1,625 crore in Karnataka till early this month.

Total cane price payable to farmers across all cane producing states is Rs 60,000-65,000 crore a year.

Highlighting measures taken in the last two years to help the sugar sector, Paswan said the government had provided soft loan to millers to clear cane arrears.

It also increased import duty to 40 per cent, offered export subsidy on raw sugar and a production subsidy to sugar mills to offset cost of cane price, promoted Ethanol Blending Program (EBP, he said, adding that these measures have helped the sector to bounce back.

India's sugar production is estimated to be 25 million tonnes in 2015-16 season, as against 28.3 million tonnes in the previous year.

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The total market capitalisation of BSE-listed companies increased by Rs 3.27 lakh crore to Rs 99.13 lakh crore from Rs 95.86 lakh crore at the beginning of the week.