Lok Sabha Question No. 123 (UNSTARRED), answered on 2018-12-11
Subject: Non-Payment of Sugarcane Dues
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: RAVINDRA VISHWANATH GAIKWAD

## GOVERNMENT OF INDIA

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

## LOK SABHA UNSTARRED QUESTION NO. 123

## TO BE ANSWERED ON 11 DECEMBER, 2018

## NON-PAYMENT OF SUGARCANE DUES

123. PROF. RAVINDRA VISHWANATH GAIKWAD:

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  the  Government  is  aware  that  a  huge  amount  of  dues  of sugarcane  farmers  is  outstanding  against  the  sugarcane  mill  owners  in  the country;
- (b) if so, the details thereof;
- (c) whether the Government is likely to take any action for clearing dues of sugarcane farmers and if so, the details thereof;
- (d) whether  the  Government  is  likely  to  take  any  necessary  step  to provide cash payment to the sugarcane farmers in future; and
- (e) if so, the details thereof and if not, the reasons therefor?

## A N S W E R

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

(a)&(b): Depressed  sugar  price  due  to  excess  sugar  production  during previous 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 the basis of Fair and Remunerative Price (FRP) 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 (c)  to  (e)  of  the  reply,  the  cane  price  arrears  for  the  sugar  season  2017-18 have  come  down  to  Rs.  1924  cr  and  Rs.5465  cr  on  FRP  and  SAP  basis respectively as on 06.12.2018.  Further an amount of Rs. 2082 cr is pending against previous sugar seasons.

(c ),(d) &(e):  The Sugarcane (Control) Order, 1966 stipulates payment of cane price within 14 days of supply, failing which interest at the rate of 15% per annum on amount due for the delayed period beyond 14 days is payable. The Powers  to  enforce  the  provisions  of  Sugarcane  (Control)  Order,  1966  with regard to payment of cane dues of farmers is mainly vested with the State its implementation.   Central  Government  from  time  to  time  issues  advisory  to the  state  Governments  for  ensuring  clearance  of  cane  price  arrears  of farmers  and  to  take  action  against  defaulting  mills  and  also  review  the

Governments as they have necessary field formation for position through meetings and video conferences.

Further,  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 few months:-

- (i) In  order  to  prevent  cash  loss  and  to  facilitate  sugar  mills  to  clear cane dues of farmers in time, the Government has 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.
- (ii) Extending 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;
- (iii) 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;
- (iv) Extending soft loans of Rs. 6139 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;
- (v) Extending  Assistance  to  sugar  mills @Rs.13.88/quintal of  cane crushed  for  sugar  season  2018-19  to  offset  the  cost  of  cane amounting to about Rs.4163 crore;
- (vi) Extending  Assistance  to  sugar  mills for defraying  expenditure towards  internal  transport,  freight,  handling  and  other  charges  to facilitate export of sugar from the country in sugar season 2018-19 amounting to about Rs. 1375 crore.
- (vii) 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 ethanol season 2018-19.

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