Record Sugar Export for India

Sugar mills have surpassed their 60 lakh metric tonne export target this year, making it easier for them to pay cane farmers and reducing arrears for this year to less than Rs. 9,000 Crore.

Main Points:

  • Pending dues to cane farmers are a thorny political issue in several States, provoking protests in western Uttar Pradesh and Punjab.
  • India produces more sugar than it consumes, leading to liquidity concerns for mills and delayed payments to farmers.
  • Exports have increased more than ten times from just 6.2 lakh metric tonnes in 2017-18, with the Centre now providing assistance to the tune of 6,000 per tonne to facilitate exports.
  • As against an export target of 60 lakh tonnes this year, contracts of about 70 lakh tonnes have been signed.

Permanent Solution for Surplus Stock:

Along with the diversion for ethanol production, which the government sees as a more permanent solution to the problem of surplus stocks, the export revenue has allowed mills to partially pay off their dues to cane farmers. At the end of May, unpaid cane dues for 2020-21 stood at Rs. 18,820 crore, along with pending payments from previous years worth Rs. 2,501 crore.

What the Law Says:

By law, cane farmers must be paid within 15 days of delivery. On August 4, the Supreme Court issued notices to 11 cane growing States as well as industry bodies to respond to a plea from Maharashtra farmers to set up a mechanism to ensure timely payment and attach the assets of mills with accumulated arrears.

Sugar Industry of India:

Sugar industry is an important agro-based industry that impacts rural livelihood of about 50 million sugarcane farmers and around 5 lakh workers directly employed in sugar mills. Employment is also generated in various ancillary activities relating to transport, trade servicing of machinery and supply of agriculture inputs. India is the second largest producer of sugar in the world after Brazil and is also the largest consumer. Today Indian sugar industry’s annual output is worth approximately Rs.80,000 crores. There are 732 installed sugar factories in the country as on 31.07.2017, with sufficient crushing capacity to produce around 339 lakh MT of sugar. The capacity is roughly distributed equally between private sector units and cooperative sector units.