Expressing disappointment over outstanding cane arrears particularly in Uttar Pradesh, Food Minister Ram Vilas Paswan today said Centre has limited role in addressing the issue and asked the state government to take action against defaulting sugar mills for recovery of dues.
The government may consider additional interest-free loan to cash-starved mills if they give assurance that the funds will be utilised to clear cane arrears and will also review export subsidy by month-end, Paswan said.
"Since we came to power, sugarcane arrears to farmers have come down to to Rs 7,760 crore so far from Rs 14,095 crore at the end of May this year. Maximum arrears of Rs 4,560 crore is in Uttar Pradesh.
"Only about 45 per cent of dues have been cleared so far. We are not satisfied," Paswan told reporters at an event on his ministry's achievements in the first 100 days of government.
The Minister said it was "unfortunate" that cane arrears have not been fully cleared yet even as the government has hiked import duty to 25 per cent from 15 per cent, raised export subsidy to USD 3,371 per tonne and is disbursing interest-free loans of Rs 6,600 crore to improve the cash-flow of millers for ensuring timely cane payment.
Stating that several meetings were called to resolve cane arrears issue in UP, Paswan said Centre has a limited role and "we are not going to call any more meetings."
"We have authorised the state to take necessary action."
Asked if the government is considering providing additional interest-free loans to millers, Paswan said: "Soft loan is going on and we have not closed it. We can think of extending more if they give assurance of clearing dues within a fixed time-frame."
He, however said the government cannot keep on giving soft loans to mills and at the same time see farmers dying of hunger on streets.
The Minister said the state government had complained that millers were not using interest-free loans extended by the Centre for clearing dues to farmers.
In January, the previous government had announced interest-free loans of Rs 6,600 crore to mills to clear cane arrears. As on September 4, Rs 5,511 crore has been disbursed out of Rs 6,094 crore sanctioned.
Asked about cane farmer suicides in UP, Food Secretary Sudhir Kumar said, "Our policy on sugar is very clear. We are going out of our way to address the issue although we have limitations. The state government has to take action."
On extending export subsidy on raw sugar, he said the decision on this matter will be taken by end of the month.
Asked if production will be hit due to possible delay in harvest on account of stalemate over cane arrears in UP, Kumar said production will be sufficient to meet consumption.
Sugar production of India, the world's second largest sugar producer and biggest consumer, is expected to be at 23.8 million tonnes in 2013-14, as against 25.1 million tonnes in the last year.
