Lok Sabha Question No. 2280 (UNSTARRED), answered on 2018-07-31
Subject: Sugar Industry
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: RAOSAHEB PATIL DANVE

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 2280

## TO BE ANSWERED ON 31 ST  JULY, 2018

## SUGAR INDUSTRY

## 2280.   SHRI RAOSAHEB DANVE PATIL:

Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether it is true that Indian sugar mills are running under a loss and if so, the reasons therefor;
- (b) the measures taken by the Government to strengthen sugar industry during the last five years;
- (c) whether there is a need for a lot of reforms in the Sugar policies of the Government and the same have been demanded by the sector and if so, the details thereof and the steps taken by the Government thereto;
- (d) whether the huge pending Cane Price Arrears cause the major reason for the continuous reason for the losses suffered by the sugar sector in the country and if so, the corrective measures taken by the Government in this regard; and
- (e) the  details  of  the  pending  cane  price  arrears,  State-wise,  factorywise, sector-wise in the country?

## A N S W E R

## MINISTER OF STATE FOR  CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI C. R. CHAUDHARY)

- (a): The  excess  sugar  production  during  the  current  sugar  season  has adversely affected  the market sentiments due to which the ex-mill prices of sugar  in  the  domestic  market  have  fallen  sharply  and    came  down  in  the range of Rs 24.50 to Rs. 26 per kg in the month of May, 2018.  Low realization from  sale  of  sugar  due  to  surplus  sugar  stocks  has  adversely  affected  the financial health of sugar mills.
- (b): With a view to improve the liquidity position of sugar mills enabling them to clear  cane price arrears of farmers, the Government has taken the following measures during last five years:-
- (i) Extended  working  capital  loans with interest  subvention  under Scheme  for  Extending  Financial  Assistance  to  Sugar  Undertakings (SEFASU - 2014)   and Soft loan scheme.
- (ii) Provided incentive for exporting raw sugar in sugar seasons 2013-14 and 2014-15;

- (iii) Facilitated  supply  of  ethanol  under  Ethanol  Blended  Petrol  (EBP) programme by fixing remunerative price;
- (iv) Provided  comprehensive  performance  based  production  subsidy  @ Rs.4.50 per quintal of cane crushed for sugar season 2015-16 payable to  farmers  against  their  cane  dues  contingent  on  mills  undertaking export and supplying of ethanol;
- (v) Provided Assistance to sugar mills @Rs.5.50/quintal of cane crushed for  sugar  season  2017-18  to  offset  the  cost  of  cane  amounting  to about Rs.1540 crore;
- (vi) Created  buffer  stock  of  30  LMT  in  sugar  season  2017-18  for  which Government  will  reimburse  carrying  cost  of  Rs.1175  crore  towards maintenance of buffer stock;
- (vii) Extending soft loans of Rs.4,440 crore through banks to the mills for setting up new distilleries and installation of incineration boilers to augment ethanol production capacity  for which Government will bear interest subvention of Rs. 1332 crore;
- (viii) Further, in order to prevent cash loss and to facilitate sugar mills to clear cane dues of farmers in time, the Government has also fixed a minimum selling price of sugar at Rs.29/kg for sale at factory gate in domestic market, below which no sugar mill can sell sugar.
- (ix) Government has also notified  new National Policy on Bio-Fuels, 2018 under  which    sugarcane  juice  has  been  allowed  for  production  of ethanol.  Further,  the  Government  has  fixed  remunerative  price  of ethanol produced from C-Heavy molasses and B-Heavy molasses/sugarcane  juice  separately  for  supply  under  EBP  during ensuing ethanol season 2018-19.
- (c): The present policies of government for sugar sector are adequate to deal with any kind of scenario.  The Government has also been taking various short-term  and  long  term  policy  measures  to  address  the  problems  of  the sugar sector as and when  required. In past few years the Central Government, has taken various  measures which have been enumerated in part (a) of the reply.
- (d): Depressed sugar price due to excess sugar production during current sugar  season  2017-18  has  adversely  affected  the  financial  health  of  sugar mills resulting accumulation of cane price arrears which peaked at Rs. 14538 cr on FRP basis and Rs. 23232 cr on State Advised Price (SAP) basis in the last  week  of  May,  2018.  As  a  result  of  various  measures  taken  by  the Government, as enumerated in part (a) of the reply, the cane price arrears for the  current  sugar  season  2017-18  have  come  down  to  Rs.  8396  cr  and Rs.16867 cr on FRP and SAP basis respectively as on 15.07.2018.
- (e): The details of pending cane price arrears of farmers state-wise and sector-wise are annexed. The factory-wise position of cane price arrears is available on DFPD's website at www.dfpd.nic.in under the link 'what's New'.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (e)  OF  THE  UNSTARRED  QUESTION  NO.  2280  DUE  FOR  ANSWER  ON 31.07.2018 IN THE LOK SABHA.

| Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   | Statement Showing state-wise,sector-wise pending cane price arrears against sugar mills during sugar season 2017-18 and earlier season as on 15.07.2018   |
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|                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           | (Rs.in crore)                                                                                                                                             | (Rs.in crore)                                                                                                                                             | (Rs.in crore)                                                                                                                                             |
| S.NO.                                                                                                                                                     | State name                                                                                                                                                |                                                                                                                                                           |                                                                                                                                                           |                                                                                                                                                           | 2017-18                                                                                                                                                   | 2017-18                                                                                                                                                   | 2017-18                                                                                                                                                   | Total                                                                                                                                                     | Total                                                                                                                                                     | Total                                                                                                                                                     |
|                                                                                                                                                           |                                                                                                                                                           | PUBLIC                                                                                                                                                    | COOPERATIVE                                                                                                                                               | PRIVATE                                                                                                                                                   | PUBLIC                                                                                                                                                    | COOPERATIVE                                                                                                                                               | PRIVATE                                                                                                                                                   | PUBLIC                                                                                                                                                    | COOPERATIVE                                                                                                                                               | PRIVATE                                                                                                                                                   |
| 1                                                                                                                                                         | Punjab                                                                                                                                                    | 0                                                                                                                                                         | 351                                                                                                                                                       | 436                                                                                                                                                       | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 351                                                                                                                                                       | 436                                                                                                                                                       |
| 2                                                                                                                                                         | Haryana                                                                                                                                                   | 0                                                                                                                                                         | 396                                                                                                                                                       | 297                                                                                                                                                       | 0                                                                                                                                                         | 0                                                                                                                                                         |                                                                                                                                                           | 0                                                                                                                                                         | 396                                                                                                                                                       | 297                                                                                                                                                       |
| 3                                                                                                                                                         | Uttar Pradesh                                                                                                                                             | 278                                                                                                                                                       | 1221                                                                                                                                                      | 10119                                                                                                                                                     | 0                                                                                                                                                         | 0                                                                                                                                                         | 182                                                                                                                                                       | 278.14                                                                                                                                                    | 1221                                                                                                                                                      | 10301                                                                                                                                                     |
| 4                                                                                                                                                         | Uttarakhand                                                                                                                                               | 101                                                                                                                                                       | 92                                                                                                                                                        | 419                                                                                                                                                       | 0                                                                                                                                                         | 0                                                                                                                                                         | 25                                                                                                                                                        | 100.99                                                                                                                                                    | 92                                                                                                                                                        | 444                                                                                                                                                       |
| 5                                                                                                                                                         | Madhya Pradesh                                                                                                                                            | 0                                                                                                                                                         | 4                                                                                                                                                         | 68                                                                                                                                                        | 0                                                                                                                                                         | 8                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 12                                                                                                                                                        | 68                                                                                                                                                        |
| 6                                                                                                                                                         | Chattisgarh                                                                                                                                               | 0                                                                                                                                                         | 1                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 1                                                                                                                                                         | 0                                                                                                                                                         |
| 7                                                                                                                                                         | Gujarat                                                                                                                                                   | 0                                                                                                                                                         | 624                                                                                                                                                       | 2                                                                                                                                                         | 0                                                                                                                                                         | 29                                                                                                                                                        | 6                                                                                                                                                         | 0                                                                                                                                                         | 653                                                                                                                                                       | 8                                                                                                                                                         |
| 8                                                                                                                                                         | Maharashtra                                                                                                                                               | 0                                                                                                                                                         | 546                                                                                                                                                       | 302                                                                                                                                                       | 0                                                                                                                                                         | 155                                                                                                                                                       | 81                                                                                                                                                        | 0                                                                                                                                                         | 701                                                                                                                                                       | 383                                                                                                                                                       |
| 9                                                                                                                                                         | Bihar                                                                                                                                                     | 68                                                                                                                                                        | 0                                                                                                                                                         | 464                                                                                                                                                       | 5                                                                                                                                                         | 0                                                                                                                                                         | 40                                                                                                                                                        | 73.46                                                                                                                                                     | 0                                                                                                                                                         | 504                                                                                                                                                       |
| 10                                                                                                                                                        | Andhra Pradesh                                                                                                                                            | 0                                                                                                                                                         | 47                                                                                                                                                        | 67                                                                                                                                                        | 0                                                                                                                                                         | 0                                                                                                                                                         | 20                                                                                                                                                        | 0                                                                                                                                                         | 47                                                                                                                                                        | 87                                                                                                                                                        |
| 11                                                                                                                                                        | Karnataka                                                                                                                                                 | 0                                                                                                                                                         | 164                                                                                                                                                       | 437                                                                                                                                                       | 0                                                                                                                                                         | 0                                                                                                                                                         | 37                                                                                                                                                        | 0.46                                                                                                                                                      | 164                                                                                                                                                       | 474                                                                                                                                                       |
| 12                                                                                                                                                        | Tamilnadu                                                                                                                                                 | 0                                                                                                                                                         | 0                                                                                                                                                         | 188                                                                                                                                                       | 49                                                                                                                                                        | 161                                                                                                                                                       | 1319                                                                                                                                                      | 49                                                                                                                                                        | 161                                                                                                                                                       | 1507                                                                                                                                                      |
| 13                                                                                                                                                        | Orissa                                                                                                                                                    | 0                                                                                                                                                         | 0                                                                                                                                                         | 9                                                                                                                                                         | 0                                                                                                                                                         | 2                                                                                                                                                         | 3                                                                                                                                                         | 0                                                                                                                                                         | 2                                                                                                                                                         | 12                                                                                                                                                        |
| 14                                                                                                                                                        | West Bengal                                                                                                                                               | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         |
| 15                                                                                                                                                        | Puducherry                                                                                                                                                | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 22                                                                                                                                                        | 0                                                                                                                                                         | 0                                                                                                                                                         | 22                                                                                                                                                        | 0                                                                                                                                                         |
| 16                                                                                                                                                        | Goa                                                                                                                                                       | 0                                                                                                                                                         | 58                                                                                                                                                        | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 58                                                                                                                                                        | 0                                                                                                                                                         |
| 17                                                                                                                                                        | Telangana                                                                                                                                                 | 0                                                                                                                                                         | 0                                                                                                                                                         | 109                                                                                                                                                       | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 0                                                                                                                                                         | 109                                                                                                                                                       |
|                                                                                                                                                           | Total                                                                                                                                                     | 448                                                                                                                                                       | 3503                                                                                                                                                      | 12916                                                                                                                                                     | 54                                                                                                                                                        | 377                                                                                                                                                       | 1713                                                                                                                                                      | 502                                                                                                                                                       | 3880                                                                                                                                                      | 14629                                                                                                                                                     |

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