NEW DELHI – The Haryana government has provided soft loans worth 1.21 bln rupees for making cane payments to farmers in the 2019-20 (Oct-Sep) season, an official at the state's cane commissionerate said.

"The amount would be given to 10 cooperative sugar mills within two weeks… Since cost of production of sugar is higher compared to realisation that mills get, government gives loans to mitigate the difference and help them make timely payment to cane farmers," the official said. 

Mills in Haryana incur a cost of 34-37 rupees to produce 1 kg of sugar, depending on whether it is a private or a cooperative mill, while the realisation is 31-32 rupees per kg.

There are 11 cooperative sugar mills and three private mills in the state. Mills have crushed cane worth 5.9 bln rupees so far in the ongoing season, of which 1.4 bln rupees has been paid to farmers.

As of Jan 5, mills across Haryana have crushed 1.7 mln tn cane to produce 163,700 tn sugar.

Mills in the state have almost completed pending cane dues of farmers from the previous crushing season.

Haryana has the highest State Advised Price for sugarcane in the country at 340 rupees per 100 kg for early maturing cane variety and 335 rupees for other varieties.

Co-operative mills also find it difficult to make timely payments to cane farmers as sugar prices have been low for over two years now because of higher cost of production and a glut in the domestic market.

The country is currently holding record-high carryover stocks of 14.58 mln tn from the previous season, according to data from India Sugar Mills Association.