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

High production cost of Sugar in UP likely to adversely impact its export

Farmer working in the field during sugarcane harvesting (Representational image: iStock)

Sugar mills are yet to clear pending dues worth Rs 2,400 crore of the last two sugar seasons to cane growers, a senior Food Ministry official said on Tuesday.

Depressing sugar prices due to surplus sugar production in two consecutive sugar seasons — 2017-18 and 2018-19 — adversely affected the liquidity of sugar mills resulting in the accumulation of cane price arrears of farmers.

Till last month, mills have cleared about Rs 84,700 crore dues of the 2018-19 sugar season (October-September) and Rs 84,900 crore arrear of 2017-18, the official said.


Still, about 2,300 crores were pending for clearance for the 2018-19 sugar season and Rs 100 crore for the 2017-18 season, he said adding that payment of cane price by the sugar mills to sugarcane growing farmers is a continuous process.

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, the official added.

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, the official said.

Under the Sugarcane (Control) Order 1966, sugar mills are required to make cane price payments 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 percent per annum on the amount due for the delayed period beyond 14 days. The state governments have powers to enforce the order with regard to payment of cane dues of farmers.

The central government from time to time issues advisory to the state governments for ensuring clearance of cane price arrears of farmers and to take action against defaulting mills.