Uttar Pradesh Government on Saturday ordered the private sugar mills in the state to clear Rs. 12,300 crore dues of the sugarcane farmers within next 15 days. Principal secretary, Sugarcane Development and Sugar Industry & Sugarcane and Sugar commissioner, UP, Sanjay Bhoosreddy, said that the sugar mills have been put on a 15-day notice to settle cane dues failing which stringent action will be taken against them.
The government has also asked mills to sell their monthly sale quota of sugar as allowed by the Centre so that its proceeds could be diverted to settle cane payments.
The cane department has issued this instruction to 20 mills which have paid less than 50 percent of the cane price.
This was one of the pre-poll promises made by the state’s ruling Bharatiya Janata Party (BJP). The party assured the sugarcane farmers that will ensure timely payment of canes to the farmers by sugar mills.
Sugar mills have paid about Rs. 22,900 crore in the current crushing season. In the previous crushing season of 2016-17, the mills paid a little over Rs. 22,600 crore during the same period.
Bhoosreddy said that Hata Mill of the Birla Group in Kushinagar district had made full payment to farmers. Also, Persandi mill of Parle Group in Bahrich district has paid 97 per cent of its sugarcane dues.
Along with this 13 private sugar mills of the private sector have paid over 80 per cent of their cane price dues, including Roopapur, Daurala, Bahadurpur, Datauli, Tulsipur, Haidergarh, Mijaura, Biswan, Launi, Bundaki, Devband, Khathauli and Tikola.
Recently, Bhoosreddy requested the central government to fix Rs. 34/kg as the base price for sugar to insulate the commodity from price dips that results in arrears build up. As per Bhoosreddy any floor price below ₹ 34/kg would not aid in clearing the outstanding amount.
The Cabinet Committee on Economic Affairs (CCEA), in its meeting held on June 6, 2018, approved Rs. 7,000 crore package to improve the problem of liquidity of sugar mills resulting in accumulation of huge cane price arrears of farmers.
The committee also announced creation of buffer stock of 3mn MT of sugar for one year and to incur an estimated expenditure of Rs. 1,175cr for this purpose. The reimbursement under the scheme would be made on a quarterly basis, which would be directly credited into farmers’ account on behalf of mills against their cane price dues.
The Indian Sugar Mills Association (ISMA) had also requested the central government recently that suggesting fixing the floor price region-wise. ISMA argued that since mills produced different grades of sugar different minimum sugar prices for the northern and southern-western belts should be fixed.
UP’s sugar production was around 12 mt in 2017-2018 on the back of higher production and a rise in recovery ratio of 10.87 per cent.