UP tops in cane arrears: Pawar

State's sugar mills owe more than Rs 1,000 crore to farmers.

Uttar Pradesh tops the list of sugarcane producing states with outstanding cane arrears payable to growers at Rs 1,106 crore in 2006-07, Agriculture and Food Minister Sharad Pawar said today.

"The largest outstanding cane arrears are in UP," he said in the Lok Sabha during question hour.

Uttar Pradesh is the country's largest sugarcane producer, followed by Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh.

Pawar said this year's outstanding dues of sugar mills in Uttar Pradesh stands at Rs 87 crore so far. Last month, the Supreme Court asked Uttar Pradesh's sugar mills to clear outstanding cane arrears within six weeks. Pawar said the central government has taken all steps to bail the cane growing states to clear their outstanding dues.

Relief package
The National Bank for Agriculture and Rural Development in consultation with the food ministry has announced a relief package for the country's sugar cooperative mills.

The package offers rescheduling of bad loans over 5-15 years as well as interest subvention to the cooperative mills.

"The Nabard package has been availed up to 85 per cent in some states," he said.

The central government has also extended a relief package to bail out sugar mills that are facing problem of falling margins due to over production in last two consecutive years.

To tide over the glut, the government has created a 5 million tonnes buffer stock to absorb the excess supply, besides taking care of interest burden of the mills. Private sugar mills owe the largest component of arrears to cane growers. "We have also extended interest free loans to bail out the mills," he said.

Over production
The country has been producing about 26 million tonnes of sugar for last two years as against a domestic demand of around 19 million tonnes, he said.

"The global sugar market has also collapsed because of too much production in Brazil and India," Pawar said.