₹7,000-cr sugar package hardly a relief: Farmers’ body

The Central government’s ₹7,000-crore package for reviving the sugar industry has hardly any benefits for the farmers, members of the Rashtriya Kisan Mazdoor Sangahthan (RKMS) said on Tuesday.

While the cane dues are about ₹22,000 crore, only ₹1,175 crore is being used for clearing dues.

“A chunk of ₹4,440 crore has been cleared for infrastructure for increasing ethanol production, subject to mills that will avail the facility and an additional ₹1,500 crore will be an incentive for mills that will export two million tonnes of sugar,” said VM Singh, Convenor, RKMS.

Singh said the exports are not going to see the light of the day as the international prices of sugar are hovering at ₹22-24 a kg as against domestic prices which are higher at ₹28-32 a kg.

Mill owners using an excuse of non-payment of dues due to fall in sugar prices is not acceptable, Singh maintained.

“When sugar prices were high, did mill owners make timely payments? In 2007-08 when the sugar prices shot up from ₹16 per kg to ₹40 per kg, instead of sharing their profits or making timely payments, the sugar mill owners multiplied their units from 35 to 95,” said Singh.

Diverting money

He also alleged that the mill owners diverted their money to energy plants instead.

Mill owners have always maintained that they were making losses and used that as an excuse for not paying cane farmers on time.

When confronted in the court of law with balance sheets that showed profits, they said they were encountering losses in the sugar segment and profiting from the by-products. “The court opined that profits from by-products have to be taken in account to assess the financial situation of the mill,” Singh said.

Sugar mills have given heavy dividends to their shareholders, loans are being given to its subsidiary companies, for example, Bajaj Hindustan has increased its tally of two mills in 2004 to 17 mills.

Other companies which have increased reserves are DCM Shriram, Balrampur Chini Mills, Triveni Engineering and Dalmia Bharat Sugar, said Singh.