Sugar Industry

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.

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.

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.

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”.

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

(Rs.in crore)

2017-18

Earlier season

                 Total

S.NO.

State name

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

This was stated by Shri C.R.Chaudhary ,MoS ,Ministry of Consumer affairs,Food and Public distribution in a written reply in lok sabha today.

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