NEW DELHI, MAY 28:
Policy interventions by the Centre have brought down sugarcane arrears due to farmers during sugar season 2014-15 to about Rs. 780 crore, with Uttar Pradesh accounting for Rs.191 crore, the Food Ministry said here on Saturday, adding that when the NDA government took over in 2014, it had a “legacy of Rs. 14,000 crore pertaining to many years.”
However, for the current year (sugar season 2015-16), the arrears are about Rs. 9,361 crore compared with Rs. 22,000 crore last year, out of which, UP accounts for Rs. 2,855 crore, the Ministry said.
“The direct payment of industry loans into farmers’ account is a best practice in the DBT (direct benefits transfer) format, where cane arrears were directly reduced by a whopping Rs. 4,305 crore, which otherwise mills may have been diverted or delayed in giving to farmers,” the Ministry added.
On UP’s arrear, the Ministry said the State had allowed a two-stage payment of FRP (Fair & Remunerative Price). “Till end June, mills are expected to pay cane dues based on FRP (Rs 230/quintal), according to which arrears are presently Rs. 2,855 cr. However, July onwards, the mills will have to pay dues based on State Advised Prices (Rs 280/qunital) on the basis of which the dues come toRs. 5,795 crore,” it added.
Cane farmers
The Ministry’s statement comes two days after Prime Minister Narendra Modi said at a public meeting in Saharanpur that it was under his government’s watch that the arrears due to cane farmers, who were owed Rs. 14,000 crore, got cleared “to a great extent”.
“About Rs. 700-800 crore of payments are still pending. I am requesting the State government and warning the sugar mills that whatever you have done to farmers for all these years, now you will not be allowed to do,” he added.
However media reports, quoting the Cane Commissioner’s Office in Lucknow stated that cane arrears of UP mills alone stand at Rs. 5,795 crore.
Referring to reduced cane arrears, the Ministry said this was possible under a new policy designed by the Centre under which a soft loan was notified with a one year moratorium on interest payments. “Unlike in the past, provisions for direct payment to farmers were made even though mills undertook the loan and Rs. 4,305 crore was disbursed in 2015-16 by banks towards payment of cane dues. This provided a direct relief to farmers which reduced cane dues arrears and also provided support to the sugar industry in terms of liquidity to settle their arrear commitments”, it said.
Ethanol
It said the modified ethanol blending program (EBP) to achieve up to 10 per cent blending levels with motor spirit also played a role.
“Remunerative prices of ethanol were fixed in an administered price regime, to help sugar industry come out of a crisis, so as to pay its cane arrears to farmers. Central Excise duties were waived for the current year increasing the ex-mill realisation on ethanol to about Rs. 48/litre,” the statement read.
Citing other benefits of the policy, such as reducing environmental pollution and saving foreign exchange as also serve as a vent for excess sugar production, it said in 2014-15, imports of about 4.2 million barrels of crude was saved through blending, resulting in foreign exchange saving of $286 million, adding that in sugar season 2014-15, there had been a net reduction of CO{-2}{- }emissions to the extent of 12.3 LMT.