Farmers and management of Kolkata-based Riga Sugar Mills today said mismatch in cost of production and sale price of sugar has led to accumulated dues of nearly Rs 600 crore for sugarcane farmers in Bihar.
The total dues of nearly 50 million sugar cane farmer families in the country would be more than Rs 18000 crore, said O P Dhanuka, chairman and managing director, Riga Sugar.
At present, while the cost of production of a quintal of sugar was close to Rs 3600 crore, the factory sale price was nearly Rs 2600 crore.
“The sugar mills are running in loses, which has led to a huge accumulation of dues for the last two seasons. The government’s faulty policies have led to this mismatch,” said Shankar Singh Vaghela, district president, Progressive Farmers Union, Sitamani, Bihar.
According to farmers, since May 2014, when NDA government came, the ex-factory sugar prices crashed from Rs 3200 to Rs 2500 per quintal in North India, against a cost of production of Rs 3600 per quintal.
While there was surplus sugar production for the last four years, import of raw sugar has added to the falling prices, said Dhanuka. During last two and half years, 45 lakh metric tonne of sugar has been imported, he added.
Recently, the government announced a subsidy of Rs 4000 per MT for export of raw sugar.
The sugar mills in the country have procured 221.8 lakh tonnes of sugar during the current season up to March 2015, against 193.8 lakh tonne last season. The government has revised its sugar production estimates to 265 lakh tonnes, as compared to the earlier estimate of 250 lakh tonne.
As on 15th March 2015, 476 sugar mills were still under operation, against 409 in the same period last year. Out of the 43 sugar mills that have closed their operations, 17 are in UP, 7 in Maharashtra and 11 in Andhra Pradesh and Telengana.
In addition to surplus production, global sugar process have fallen due to high production in Brazil and massive depreciation of Brazilian currency in comparison to the US dollar, making sugar exports from Brazil even cheaper.