Sugar Mills in India Owe Farmers a Whopping $4.38 Billion

India is among the biggest producer of sugar in the world, but the situation of the actual sugarcane farmers is in a sorry state in Asia’s second-biggest economy. According to sources inside the Indian government, millions of sugarcane farmers have gone without any pay from the sugar mill operators for around a year now, and the total unpaid bills have now ballooned to an incredible $4.38 billion. At this point, around 50 million sugarcane farmers have not been paid for what they supplied to the sugar mills.

The biggest reason behind this sorry state of affairs is the fact that sugarcane production reached record levels over the past year and in turn, the price of sugar plummeted in India. In such a scenario, the financial situation of most sugar mills in the country took a nose dive and eventually, they found themselves in a position in which they did not have enough to pay the farmers. This revelation comes at a very tricky time for the current Indian government led by Prime Minister Narendra Modi. The world’s largest democracy went into polls today and considering the sort of clout farmers have as a voting base; this should come as a big blow to the government.

One of the officials at the Rashtriya Kisan Mazdoor Sang, a union of laborers and farmers, stated that the Prime Minister’s promise regarding the disbursement of payments to farmers within a fortnight had not been kept. He said, “The prime minister publicly promised farmers – in 2014 and 2017 – to help them get their payments within 15 days of selling their produce to sugar mills.” The farmers belong to some of the most important states in India if one is to look at it through the prism of the Indian elections. The 50 million farmers belong to India’s most populous and politically important state Uttar Pradesh, Punjab and Bihar among others.

Throughout the last couple of years, the price of sugar nosedived by as much as 20%, and that sent the sugar mills into a financial tailspin as farmers’ produce continued to rise to unprecedented levels. A member of a farmers’ association stated that many farmers are now in dire straits and are barely able to make a living due to the state of affairs. He also stated that the government had done nothing to remedy this situation.

Susan Svoboda

Susan Svoboda has more than a decade of experience in news and picture editing. She has worked as a photo editor for some local newspapers before moving into FinancePlush. She regularly contributes photo stories about recent events of finance world. She has lots of creative ideas to apply. In her free time, she loves to learn new tools of graphic designing to improve herself.

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