NEW DELHI| PUNE: Sugarcane arrears of farmers have jumped 70% in a year to a record Rs 20,000 crore as mills struggle to pay them amid a glut in the market, a development that could influence the vote in key states such as Uttar Pradesh during the upcoming general election.
To be sure, the government has sought to assuage agrarian distress by announcing an income transfer scheme in the interim budget for some farmers. But the Centre’s sugar directorate is reluctant to increase the price much amid abundant supply.
“There is no shortage of sugar. There has been a long-drawn demand from industry to raise MSP by Rs 5-6 a kg for liquidity. But even if we increase the MSP to help them clear the mounting arrears, it would not be beyond Rs 1-2 per kg,” said a sugar directorate official.