Sugar mills yet to clear pending dues of Rs 2,400 crore of last 2 sugar seasons to cane growers

25 Feb 2020 Evaluate

The Food Ministry has said that sugar mills are yet to clear Rs 2,400 crore pending dues of the last two sugar seasons (2017-18 and 2018-19) to cane growers. Depressed sugar prices due to surplus sugar production in last two consecutive sugar seasons adversely affected the liquidity of sugar mills resulting in accumulation of cane price arrears of farmers.

Total dues that mills were to pay till February 2020, was Rs 87,000 crore for 2018-19 and Rs 85,000 crore for 2017-18 sugar season (October-September). Still, about 2,300 crore was pending for clearance for the 2018-19 sugar season and Rs 100 crore for the 2017-18 season.

In a bid to improve the liquidity position of sugar mills in the country and enabling them to clear cane price dues of farmers, the government had taken several measures in 2017-18 and 2018-19 sugar seasons. So far, about Rs 1,574 crore has been disbursed to sugar mills under various assistance schemes.

Under the Sugarcane (Control) Order 1966, sugar mills are required to make cane price payment to farmers within 14 days of supply of cane. If the mills fail to make the payment, then they have to pay interest at the rate of 15% per annum on amount due for the delayed period beyond 14 days.

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