Lok Sabha Question No. 2074 (UNSTARRED), answered on 2018-07-31
Subject: Outstanding amount to Sugarcane Farmers
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: SANTOSH AHLAWAT, OM PRAKASH YADAV, SUMEDHANAND SARASWATI, RANGASWAMY DHRUVANARAYANA, VASANTHI M.

## GOVERNMENT OF INDIA

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

LOK SABHA UNSTARRED QUESTION NO. 2074

TO BE ANSWERED ON 31 ST  JULY, 2018

## OUTSTANDING AMOUNT TO SUGARCANE FARMERS

2074.

SHRIMATI SANTOSH AHLAWAT: SHRI OM PRAKASH YADAV: SHRI SUMEDHANAND SARSWATI: SHRI R. DHRUVA NARAYANA: SHRIMATI VASANTHI M.:

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 has taken any steps to solve the problem of excessive outstanding amount of the farmers for their sugarcane caused due to cash crunch of sugar mills and also approved a central package for sugar mill and if so, the details thereof;
- (b) whether it is also true that the sugarcane arrears have now crossed Rs. 22,000 crore on the back of record sugar production and if so, the details thereof;
- (c) whether the market price of sugar is falling continuously because of its  excessive  production  at  present  and  possibility  of  high  production  in future; and
- (d) if so, whether any concrete step has been taken by the Government in this regard and if so, the details thereof?

## A N S W E R

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

- (a): Yes,  Madam.  With  a  view  to  improve  the  liquidity  position  of  the sugar  mills  enabling  them  to  clear  cane  price  arrears  of  farmers,  the Government has brought out a comprehensive package with the following:
- (i) Scheme    for  'Assistance  to  sugar  mills'  under  which  financial assistance  @Rs.5.50/quintal  of  cane  crushed  will  be  provided  to sugar mills to offset the cost of cane amounting to about Rs.1540 crore;

- Creation  of  buffer  stock  of  30  LMT  for  which  Government  will reimburse  carrying  cost  of  Rs.1175  crore  towards  maintenance  of
- (ii) buffer stock;
- (iii)    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;
- (iv) 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.
- (b): 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,  the  cane  price  arrears  have  come  down  to  Rs.  8153  cr  and Rs.16600 cr on FRP and SAP basis respectively as on 27.07.2018.
- (c) & (d): The excess sugar production during  the  current  sugar  season and  indication  of    surplus  production  in  the  ensuing  season  has  adversely affected  the market sentiments due to which the ex-mill sugar prices 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.  However, as a result of various interventions undertaken by government as enumerated in part (a) of reply the  ex-mill  prices  of  sugar  has  improved  to  Rs.  30  to  33  per  kg,  thereby improving the liquidity position of sugar mills.

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