Echoing the demand of the sugar industry and farmers’ organisations, political representatives of the State governments urged the Centre on Thursday to initiate steps to enable the industry to clear the arrears of Rs. 19,377 crore due to sugarcane farmers.
At a consultation meeting convened by Union Food Minister Ram Vilas Paswan, cane-growing States wanted the Union government to reschedule the repayment of interest-free loans by the industry to seven years instead of five and extend financial assistance from the Sugar Development Fund to industry for modernisation and ethanol blending, apart from raising the import duty to 40 per cent.
Buffer stock
The States demanded that 10 per cent of the total sugar production be set aside to create a buffer stock on government account. According to the Indian Sugar Mills Association, sugar production till April 15 was 263.56 lakh tonnes, which is 32.06 lakh tonnes more than the output in the corresponding period in 2013-14.
The State representatives urged the Centre to give financial assistance directly to sugarcane growers. In 2013, the Centre extended a Rs. 6,600-crore package to the industry to clear cane arrears. However, due to low realisation from sugar, mills are unable to recover the cost of production and generate enough cash flows to clear cane arrears.
Speaking to journalists, Mr. Paswan said he got “no satisfactory reply” from any State on how it proposed to help industry clear arrears. Of the total cane arrears, Rs. 9.500 crore is due from millers in Uttar Pradesh alone.
Some of the States, particularly U.P., objected to linking the Fair and Remunerative Price of sugarcane with sugar prices. They argued that while setting the FRP at Rs. 220 per quintal for this year, the Centre had taken the sugar price at Rs. 31 per kg where as it is around Rs. 23.75 only. At that price of the sugar, the FRP should have been around Rs. 195 per quintal. Therefore, they wanted the Centre to pick up the difference of Rs. 25 per quintal.
States divided
To a question, Mr. Paswan agreed that the States wanted to push their responsibility on the Centre.
The States were divided on this issue: some of them wanted financial assistance to be given to mills to enable them to clear arrears, while some others wanted the farmers to be assisted directly by the government.
“We are meeting all stakeholders because we are sensitive to the problem of sugarcane growers and also the industry,” he said.
Among those who attended the meeting were Agriculture Minister Radha Mohan Singh, MoS Sanjeev Baliyan and Women and Child Welfare Minister Menaka Gandhi who is a Lok Sabha member from Uttar Pradesh. Eleven States were represented but no Chief Minister showed up.