Minister of State for Food and Consumer Affairs C R Chaudhary has said that as a result of various measures taken by government to help the sugar industry, sugarcane arrears to farmers have come down to Rs 8,153 crore and Rs 16,600 crore on Fair and Remunerative Price (FRP) and State Advised Price (SAP) basis, respectively, as on July 27, 2018, from the peak of Rs 23,232 crore in May-end.
Chaudhary also said that the liquidity position of sugar mills has improved with an increase in the ex-mill prices of sugar to Rs 30-33 per kg from 24.5-26 per kg in May. The cane price arrears peaked to Rs 23,232 crore at the end of May based on the SAP fixed by the state governments. On the basis of the FRP announced by the Centre, the peak arrear was Rs 14,538 crore. He added that the arrears were high due to fall in sugar prices because of record production.
In order to improve the liquidity position of sugar mills and help them in clearing arrears, the minister said that the Centre has announced assistance to mills of Rs 5.50 per quintal of cane crushed, amounting to Rs 1,540 crore. The Centre has also created a buffer stock of 30 lakh tonnes, which will have a burden of Rs 1,175 crore on the exchequer. It will also provide a soft loan of Rs 4,440 crore to mills for creating ethanol capacity. The government will bear an interest subvention of Rs 1,332 crore.