Lok Sabha Question No. 1434 (UNSTARRED), answered on 2020-02-11
Subject: Decontrol of Sugar Sector
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Bidyut Baran Mahato, Gajanan Chandrakant Kirtikar, Shrirang Appa Barne, Sanjay Sadashivrao Mandlik, Sudheer Gupta

## GOVERNMENT OF INDIA

## Mll{lsrRY oF coNsuMER AFFATR$, FOOD &  pUBLtC  DtSTRtBUTtOil DEPARTMENT OF FOOD Al{D PUBLIG DISTRIBUTIOil

## LOK SABHA

## UNSTARRED OUESTION NO. 1434 TO BE ANSWERED  ON 1{th FEBRUARY, 2O2O

## DECONTROL  OF SUGAB SECTOR

1434. SHRI BIDYUT BARAN MAHATO:

SHRI GAJANAN KIRTIKAR:

SHRI SHRIRANG APPA BARI{E:

SHRI SANJAY SADASI{IV RAO MANDLIK:

SHRI SUDHEER GUPTA:

Will the Minister of  CONSUMER AFFAIRS,  FOOD AND PUBLIG DISTRIBUTION  iltffidl firrfr,  ry st{ Trffim, hilur ri* be pleased to state:

- (a)  the number of sugar mills operating in the country at  present, State/UT-wisel
- (b)  whether it is fact that the countryts sugar industry is suffering ftom various hurdles during recent times and if so, the details thereof along with the corrective measures taken/being taken by the Government  in this regard; \
- (c) whether the Government  has received any requests/demand from sugar mills regarding complete decontrol of the sugar industry;
- (d)  if so, the details thereof along with the response  of the Government thereto;
- (e)  the impact likely on con$umeni, farmers and industry after the decontrol of sugar secto4 and
- (O  the rate at which Government procures sugar for ration shops and the likely rate after decontrol?

## ANSWER

MIN|STER OF STATE FOR MIilISTRY OF GONSUMER  AFFAIRS,  FOOD &

PUBLIC DISTRIBUTION (sHRr DANVE RAOSAHEB DADARAO)

(a): The State/UT.wise number of sugar mills in the country presently in operation  is given at Annexure.

- (b): Excess production  of sugar in the sugar season 2o17-1o had advensely  affected market sentiments  due to which the ex-mill prices of sugar in the domestic market fell sharply in the range of Rs 24.50 to Rs 26 per Kg in the month of Mayr2ol8 which had advercely affected the liquidity of sugar mills resulting in accumulation  of cane price arrears of farmerrs. Low realization from sale of sugar due to surplus sugar stocks has adversely  affected the financial health of sugar mills during the sugar season 20{8-19 also. Further huge carryover stocks and estimation of surplus production  than the estimated consumption  in the current sugar season 2O19-2O may also affect the liquidity position of sugar mills.

ln order to improve the liquidity of sugar mills thereby enabling them to clear cane price dues of farmers, the Gentral Government took following measures during last two sugar seasons and the current sugar season:

## SUGAR SEASOil 2017-{E

- (a)  Fixed a minimum selling price (MSP) of sugar at Rs.29/kg  w.e.f. O7.O6.20{E which was revised to Rs. 31/kg w.€.f.  14.02.21019.
- (ii) Extended Assistance to sugar mills @Rs.5.5o/quintal of cane crushed for sugar season 2lD17-18  to offset the cost of cane amounting to about Rs.43O crore.
- (iii)  Greated buffer stock of 3O LMT in sugar season 2O17-.,,A for which Government is reimbursing carrying cost of Rs.7EO crore towards maintCnance  of buffer stock.

## SUGAR S 20,18-{9

- (i) Extending Assistance to sugar mills @Rs.{3.88/quintal  of cane crushed for sugar season 2O{E-{9 to offset the cost of cane amounting to about Rs.3OOO crore.
- (ii)  Extending Assistance to sugar mills for defraying expenditure towards internal transpoil, freight, handling and other charges to facilitate export of sugar from the country in sugar season 20,,,8.-19 amounting to about Rs. 7OO crore.
- (iii)  Extended soft loans amounting to Rs 74cl2 crore to sugar mills through banks, for which Government would bear interest subvention of about Rs 51E crore @7o/o for one year.

..............3/'

## SUGAR SEAsoN 20.t9-20

- (i) Greated  bufler stock of 4O LMT of sugar for a period of one year from lst  August, 2ll19 to 31st July, 2O2O for which Government  is reimbursing  carrying cost of Rs.{674 crore towards  maintenance  of buffer stock,
- (:i) Providing assistance to sugar mills @ Rs lOffiANlT to facilitate export of sugar for expenses on export of 6O LMT of sugar in sugar season 2O19-2O for which an estimated expenditure of Rs 6288 Gr would be borne by Govt.

The Government  has allowed production  of ethanol from sugar and sugar syrup for current ethanol supply year 2O19-2O (December, 2O19 November, 2O2Ol and fixed the remunerative ex-mill price of ethanol derived from G-heavy molasses @ Rs. 43.7511ifie, from B-heany molasses @ Rs.54.27l  litre and @ Rs. S9.4Ellitre for the ethanol derived from sugarcane juice/ sugar/ sugar syrup.

- (c) to (f): Government has not received any request from sugar mills regarding complete decontrol of the sugar industry. The Gentral Government has already decontrolled the sugar sector partially, from April 2013, by removing the levy obligation on sugar mllls from 2012-13 sugar season. After deregulation of sugar sector, a new dispensation for distribution  of sugar under Public Distribution System (PDS) was put in place w.e.f 0{.06.20{3 wherein State government  / UT administrations are required to  procure sugar from the open market through the transparent  system. The Gentral Government had been reimbursing a fixed sugar subsidy @ Rs. 1E.5O per kg to the participating  states/UTs towards distribution of sugar under PDS to the taryeted population covering BPL population  and all the population  of ilorth Eastern states/Hilly states and island territories to make sugar available at the retail issue price of Rs. 13.5 per Kg.

Now, the National Food Security Act (NFSA) is being universally implemented in the country. There is no identified  category of BPL under the NFSA. However, the Antayodaya  Anna Yoiana (AAY) beneficiaries are clearly identified. As such, the Government of lndia has reviewed the sugar subsidy scheme and decided to continue it fior AAY families w.e.f June 2017. The Gentral Government is reimbursing a fixed subsidy of Rs {8.5 per kS @ { kg per month per AAY families to pailicipating  states /UTs.

**!t*

## AililExURE REFERRED TO lil REPLY TO PART (a) OF THE UNSTARRED OUESTION 1t1O.1434  FOR ANSWER  ON { 1.O2.2O2O  11{ THE LOK SABHA.

## Statement  showing State/UT-wise number of sugar mills in operation during current sugar season 2O19-2O

| 8!. J{o.   | Name of State     | Number of Sugar Mills in operation during 2O19-2O $ugar season   |
|------------|-------------------|------------------------------------------------------------------|
| 1          | Andhra Pradesh    | 12                                                               |
| 2          | Bihar             | 11                                                               |
| 3          | Gujarat 15        |                                                                  |
| 4          | Haryana           | 14                                                               |
| 5          | Karnataka 62      |                                                                  |
| 6          | Maharashtra 14',  |                                                                  |
| 7          | Punjab            | ,16                                                              |
| 8          | Tamil Nadu 21     |                                                                  |
| I          | Telangana 6       |                                                                  |
| {o         | Uttar Pradesh 1{9 |                                                                  |
| 11         | Uttarakhand       | 7                                                                |
| 12         | Madhya Pradesh    | {6                                                               |
| {3         | Ghhattisgarh      | 4                                                                |
| All India  | All India         | 43                                                               |

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