NEW DELHI: The Supreme Court on Wednesday took of the cause of distressed sugarcane farmers, who are seeped in debt waiting for decades for receiving a fair return for their produce, as it sought responses from the Centre and 11 states on a PIL by agriculturists seeking a mechanism to recover nearly Rs 20,000 crore, which is due to farmers from sugar mills.
A bench of Chief Justice N V Ramana and Justice Surya Kant issued notices to the Centre, Uttar Pradesh, Maharashtra, Punjab, Uttarakhand, Haryana, Gujarat, Bihar, Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, and four major sugar mills/associations – Bajaj Hindustan Sugar Ltd, Indian Sugar Mills Association, cane Agro Energy (India) Ltd and Indian Sucrose Ltd.
Appearing for petitioner Raju Anna Shetti and four others, senior advocate Anand Grover pegged the agriculturists argument on the recent statement made by minister of state for food and consumer affairs in Rajya Sabha on February 12, mentioning that sugar mills owe Rs 18,084 crores to cane farmers as on January 1, 2021.
The minister had also informed Parliament that owing to various measures taken by the government, the cane dues of farmers for sugar seasons 2017-18, 2018-19 and 2019-20 are Rs 199 crore, Rs 410 crore and Rs 766 crore, respectively, as on January 31, 2021.
The petitioner said of the nearly Rs 20,000 crore payment due to farmers, the sugar mills of UP owed Rs 7,555 crores, Karnataka Rs 3,585 crore and Maharashtra at Rs 2,030 crores. The petitioners said for the 2020-21 crushing season, growers supplied sugarcane worth Rs 14,000 crores to the sugar mills but have received only Rs. 4,448 crores towards payment.
Explaining the problem, the petitioners said it has become a habit with states to announce hish State Advised Price, which is much more than the Fair and Remunerative Price. “High SAP cane prices, high cost of production and low ex-mill prices for sugar is leading to mounting arrears as millers do not make any margins resulting in their inability to pay the farmers for sugarcane they procure,” they said.
Explaining the problem, the petitioners said it has become a habit with states to announce hish State Advised Price, which is much more than the Fair and Remunerative Price. “High SAP cane prices, high cost of production and low ex-mill prices for sugar is leading to mounting arrears as millers do not make any margins resulting in their inability to pay the farmers for sugarcane they procure,” they said.
The petitioners pointed to the massive mismanagement that happened during the UPA regime. “The arrears were as high as Rs 13,124 crore on 31 March 2014. The debt levels for the sugar industry have increased from Rs 11,443 crore (2007-08) to Rs 36,601 Crores (2012-13). Out of Rs 36,601 crore, private and public companies constitute about Rs 25,955 crore of debt and cooperatives about 10,646 Crores. The net- profit ratio has also depreciated from 9% in 2008-09 to 1% in 2012-13,” they said.
India holds the second spot in the world after Brazil in terms of production of sugar. In 2020, India produced 266 lakh tonnes of sugar. As on October 1 last year, there were 752 sugar mills in the country – 330 in the cooperative sector, 43 in the public sector and 379 in the private sector.
India holds the second spot in the world after Brazil in terms of production of sugar. In 2020, India produced 266 lakh tonnes of sugar. As on October 1 last year, there were 752 sugar mills in the country – 330 in the cooperative sector, 43 in the public sector and 379 in the private sector.
In 2017-18, there was an increase in sugarcane arrears as a result of increased production and low prices of sugar in domestic and global markets, the petitioners said. The cane price arrears as on September 30, 2018 were Rs 11,697 crores and UP alone accounted for nearly two-third of the arrears. The problem continued during 2018-19 and arrears were Rs 7,796 crore on September 30, 2019 with UP accounting for 63% of total arrears, followed by Gujarat (8.5%) and Punjab (6.2%). Five big states – Uttar Pradesh, Bihar, Punjab, Haryana and Uttarakhand, which announce the SAP – accounted for nearly 80% percent of total arrears in 2018-19.
However, they acknowledged the NDA government’s efforts in helping the sugar cane farmers get their dus. “Government interventions such as remunerative and assured price of ethanol, revision in Minimum Selling Price (MSP) of sugar, financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity and to molasses based stand-alone distilleries, etc. have resulted in significant reduction in cane price arrears, from Rs 28,390 crores on March 31, 2019 to Rs 9444 crores on September 15, 2019.
