State seeks subsidy to bail out mills, sugarcane growers

To bail thousands of sugarcane growers of the state, the government has sought a subsidy of Rs1000 per quintal on sugar manufactured by its 16 private and cooperative sugar mills. Agriculture Minister Tota Singh has shot off a letter to Union Agriculture Minister Radha Mohan Singh on the matter. The Centre has called a meeting of senior agriculture officials of Punjab and other states on August 24 in Delhi to discuss the matter of delay in payment of arrears to cane growers. It is learnt that state officials would convey to the Centre that the state sugar mills are unable to pay dues to the farmers primarily because sugar production has turned non-viable due to a sharp fall in its prices and higher cane prices. They would insist that the state mills get just Rs125 crore in the Rs6,000 crore interest-free central loan quota which is inadequate. The Centre therefore must give subsidy on sugar produced in the state. “The mills are bearing a loss of Rs90 for processing 1 quintal of cane procured at the rate of Rs295. The sugar prices in the wholesale market are Rs23-25 per kg against the average production cost of Rs35 a kg. In the prevailing circumstances, there is no other way to support cane growers and sugar mills except for extending them subsidy,” said Tota Singh while talking to The Tribune. While seven private sugar mills owe Rs221 crores to cane growers, the nine cooperative mills are yet to pay Rs180 crores to them. “The cooperative sugar mills would clear their dues by December 30. Even if the Centre accepts our demand, the maximum profit of mills would not exceed Rs2 per kg of sugar,” he added.