Sugarcane farmers’ dues skyrocket 54 times in one year; surplus production to blame

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Published: July 22, 2019 4:12:08 PM

Outstanding payment dues to sugarcane farmers have shot up by 54 times in just one year, as sugar mills grapple with tight liquidity amid a surge in production.

sugarcane, sugarcane farmers, minimum support price, sugar mills, farmers in india, due payment, rajya sabhaSugarcane farmers have their cash stuck with the sugar mills, who are unable to disburse payments due to non-availability of funds. (Bloomberg)

Outstanding payment dues to sugarcane farmers have shot up by 54 times in just one year, as sugar mills grapple with tight liquidity amid a surge in production. Sugarcane farmers have their cash stuck with the sugar mills, who are unable to disburse payments due to non-availability of funds. Depressed sugar prices due to surplus production in 2017-18 have also resulted in accumulation of cane price arrears of the farmers, Danve Raosaheb Dadarao, MoS, Ministry of Consumer Affairs, said in a reply to a question in the Rajya Sabha. Sugar mills have held back Rs 15,565 crore of the sugarcane-growing farmers in 2018-19, which was Rs 285 crore in the previous year. Farmers hailing from Uttar Pradesh, Maharashtra, Punjab, Gujarat, and Bihar are the worst affected with the liquidity crisis of the sugar mills.

“With a view to improving the liquidity position of sugar mills in the country and enabling them to clear price dues of farmers, the Government has increased the MSP of sugar to Rs 31 per kg and has extended support to sugar mills,” Danve Raosaheb Dadarao said in Rajya Sabha.

Sugarcane is of the most important cash crops grown in India and it provides direct or indirect employment to a large number of people. Apart from this, sugarcane also majorly contributes to the exchequer as India is a bulk producer and exporter of sugarcane. In states like Uttar Pradesh and Maharashtra, sugarcane accounts for a significant portion of the state economy. Amid surplus production, sugarcane exports from India rose by 24 per cent in 2018-19, which was around 13 per cent a year ago.

Disturbed by the non-payment of dues, members of Tamil Nadu Sugarcane Farmers’ Association staged a demonstration last month, urging the State government to ensure the payment of their due amount immediately. Delay in settling dues have left sugarcane farmers in dismay as they do not have the money to pay the labourers for cutting cane and further borrowing is not an option as they are already burdened with increasing debt.

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