As Uttar Pradesh polls loom, Centre moves to keep sugarcane growers happy

A slew of measures taken by the government have given sugar mills the elbow room to make timely payments to farmers

Ahead of the Uttar Pradesh elections next year, the government has ensured record purchase and timely payment to sugarcane growers, who mostly hail from the region that has been the hotbed of the nine-month long farmers' agitation.

A slew of measures taken by the government, such as export of surplus sugar, diverting the sweetener for production of ethanol have given sugar mills the elbow room to make timely payments to farmers.

The farmers' agitation at the borders of the national capital, demanding roll back of the agri-marketing reforms, has been a major irritant for the Modi government, which is making extra efforts through record purchase of wheat and sugarcane to keep the ryots happy.

“In the current sugar season 2020-21, sugarcane worth about Rs 90,872 crores has been purchased by sugar mills which is the record highest, against which about Rs 81,963 crores cane dues have been paid to farmers,” a Food Ministry spokesperson said.

Uttar Pradesh, Maharashtra and Karnataka are the top three sugarcane growing states. Acreage under sugarcane production in Uttar Pradesh is 23 lakh hectares as against 11 lakh hectares in Maharashtra.

Sugar mills have also been asked to take advantage of firm global sugar prices and plan export of raw sugar in advance in the new season (October-September), the official said.

This indicates that the government was unlikely to extend the export subsidy from the new season, as it would be easier for domestic mills to sell sugar abroad in view of high global prices.

The ministry also asked mills to “sign forward contracts with the importers to take advantage of high international prices of sugar and global deficit.”

Export of sugar and diversion to ethanol would help in improving the liquidity of mills, enabling them to make timely payment of cane dues of farmers.

It will also stabilise ex-mill price of sugar in the domestic market, which in turn will further improve mills' revenue realisation and address the problem of surplus sugar, the official said.