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| The bitter truth | | UP's sugar mills crushed by government |
| Business Standard / New Delhi Jan 21, 2010, 00:23 IST |
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India’s sugar industry has always been subject to government regulation. But in Uttar Pradesh the industry has come under a vice-like grip of the state government. At a time when sugar mills ought to be crushing cane, they are busy escaping the crushing weight of government-inspired charges of forgery, cheating, poaching of cane and other irregularities. Worse still, FIRs have been lodged against almost 90 private sector mills, accusing them of committing non-bailable offences under the draconian Essential Commodities Act. While UP’s businessmen have become used to such treatment from Chief Minister Mayawati, the pattern is slightly different this time. While in the past, the FIRs used to name those in charge of the estate, this time, the promoters of the mills are being named. All this lends credence to allegations made publicly by Chief Minister Mayawati’s adversaries that this action is extortionary in intent. Since sugar prices are ruling sky-high and, as a result, the industry is making good profits, the ruling dispensation seems to want a bigger slice of the cake that only a bigger threat can extract.
This apart, another major issue on which the UP government has sought to hurt sugar mills — and even take on the Union government — is on the import of raw sugar. The Union government had permitted this to mitigate cane shortage and rein in spiralling sugar prices. The state has disallowed the entry of imported raw sugar for processing and sale despite repeated requests by the Centre. As a result, some 9 lakh tonnes of raw sugar imported by the UP mills is stuck at the ports. The justification offered by UP for its action — that the move is to guard the interests of the local cane growers — is unconvincing because sugarcane availability is insufficient to operate the plants for the full season. The cane allocated to the mills is likely to get exhausted by February, whereas normally cane supplies continue till the beginning of summer. Moreover, while the cane growers’ shoulders are being used to fire the salvoes against the millers, the former seem happy to get Rs 225 to Rs 230 a quintal, based on actual recovery, against a state advised price of Rs 165 to Rs 170 a quintal. In fact, this has prompted the farmers to divert part of their holdings to sugarcane from wheat. Given this, it would be better for UP to realise the repercussions of its ill-advised actions against the mills and retract its controversial steps. In any case, the Centre has already taken the sting out of the raw sugar entry ban by freeing mills of the obligation of processing the raw sugar imported at their own plants. The millers have one weapon to fend off the state government’s hurtful actions — they can suspend crushing cane. An angry peasantry may then march to Lucknow!
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