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Sugarcane arrears to surge to Rs 35,000 crore in April

Farmers are not getting the value for their production despite a bumper production

By R. Suryamurthy in New Delhi
  • Published 5.02.19, 1:22 AM
  • Updated 5.02.19, 1:35 AM
  • a min read
While production would be about 60 lakh tonnes, the farmers would be selling only 20 lakh tonnes (Shutterstock)

Sugarcane arrears are set to surge to Rs 35,000 crore by mid-April, adding to the agrarian distress, unless the government acts fast and comes out with measures, including a hike in sugar prices as demanded by the industry.

“The cane arrears have reached about Rs 20,000 crore by the end of January... It is feared that it may further increase to very uncomfortable levels by the end of April 2019,” Abinash Verma, director-general of the Indian Sugar Mills Association (Isma), said on Moday.

Industry sources indicated the arrears could reach about Rs 35,000 crore by mid-April, when production would be at its peak.

While production would be about 60 lakh tonnes, the farmers would be selling only 20 lakh tonnes, which add further pressure to the working capital of the mills and limiting their ability to pay the arrears.

The arrears would peak around the time voting for the Lok Sabha elections is likely to takes place. Maharashtra and Uttar Pradesh — which account for almost 75 per cent of the sugarcane grown in the country — would have the maximum number of cane farmers waiting for arrears.

The Telegraph

While there are 80 Lok Sabha seats in Uttar Pradesh, Maharashtra has 48 members in the lower house of Parliament and the two states are ruled by the BJP.

“The increasing cane arrears is a major issue for the farmers as they are not getting the value for the production despite a bumper production,” Raju Shetti, MP and leader of the Swabhimani Shetkar Sangha, a farmers movement in western India.

He said the government should increase the sugar prices, which would help mills get more money and in turn, farmers would be paid. Shetti said the Rs 6,000 support announced in the Union budget was too little to meet even the basic input cost of farmers and there is no certainty that the scheme would continue after the general elections.

“The loan waiver and minimum income for poor (announced by Congress president Rahul Gandhi) seems much better,” Shetti said.