Context

There has been surplus production of sugar in the country since sugar season 2010-11 (except reduction due to drought in sugar season 2016-17); & sugar production is likely to remain surplus in the country in coming years due to introduction of improved varieties of sugarcane.

Issue

The excess stocks of 60 LMT which remain unsold also block funds of sugar mills to the tune of about Rs. 19,000 crore thereby affecting liquidity positions of sugar mills resulting in accumulation of cane price arrears of farmers

In news

Cabinet approves modified scheme to enhance ethanol distillation capacity in the country.

Significance

• This will increase income of farmers as other feed stocks such as cereals (rice, wheat, barley, corn & sorghum), sugarcane and sugar beet to be used for production of ethanol
• For benefiting a large population of farmers, Government is encouraging distilleries to produce ethanol from maize & rice available with FCI
• Diversion of excess sugarcane and sugar to ethanol will facilitate the clearance of cane price dues of farmers

Source: PIB