Sugar exports helped in clearing arrears to cane farmers, say millers

ISMA claims ₹21,096 crore paid to sugarcane farmers after sugar export decision, benefiting domestic markets and farmers.

Barely a month after the Centre’s decision to allow the export of 10 lakh metric tonne of sugar, the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has claimed that almost ₹21,096 crore of arrears due to sugarcane farmers have been paid.

Terming the opening up of sugar exports as a “wonderful decision”, ISMA director general Deepak Ballani said the foreign exchange that sugar millers have received is being used to clear the arrears. Farmers organisations, however, have viewed the move with suspicion, complaining that the benefits of sugar exports have not reached cane farmers.

Citing the example of Maharashtra, Mr. Ballani said domestic prices for one kilogram of sugar are hovering around ₹37, while in the international markets, it is around ₹44. “Our cost of production is almost ₹40 to ₹41. We still have 62 lakh metric tonne (LMT) as a closing stock, which is very healthy stock. So if we export 10 LMT, we get around ₹4,500 crore of income and the foreign exchange will go towards paying arrears. Also, the domestic prices will stabilise. We don’t want to lose the market to other countries and that is exactly what has happened,” he said, claiming that the export decision has helped the domestic markets too.

Mr. Ballani added that about 2.5 to 3 LMT of sugar have been exported so far, while contracts for exporting a further 3 LMT have been signed. “In another month or two, the entire 10 LMT would reach the international market,” he added.

According to data provided by ISMA, as on January 20, before exports were allowed, the sugarcane arrears due to farmers were ₹12,019 crore of the total payable amount of ₹38,733 crore. As on February 17, the total amount payable is ₹61,848 crore of which the arrears are just ₹14,038 crore. “In January, 69% of the payments were made, but in February, this has increased to 77.3%,” Mr. Ballani said, adding that ₹21,096 crore was paid within the last month.

The Centre had allowed sugar exports to resume on January 21, after a gap of almost two years. Many farmers are watching the policy change with suspicion. The western Uttar Pradesh-based leader of the All India Kisan Sabha D.P. Singh told The Hindu that the benefits of exports have not reached the farmers.

“Look at the State-advised price (SAP) of sugarcane in Uttar Pradesh. It has not been changed for the last three years. When they announced the new SAP on Tuesday, we hoped that there will be some increase, but it is unchanged at ₹370 per quintal. There is huge increase in the input cost,” he said, adding that the government’s policies are in favour of the sugar millers. “It is we farmers who work hard and the benefits go to a handful of mill owners,” he complained.