Adityanath warns UP sugar mills over delay in clearing farmers' cane dues

UP mills have A sugarcane outstanding of nearly Rs 11,000 crore

Uttar Pradesh Chief Minister Adityanath on Friday warned the state sugar mills over the inordinate delay in clearing the farmers’ outstanding for the recently concluded 2019-20 crushing season.

Presiding over a review meeting in Lucknow, Adityanath directed officials to take action against mills, showing laxity in settling the farmers’ dues.

Of the 119 mills in UP, a majority of 94 units are operated by the private sector, with the remaining owned by the cooperative and state government sectors.

Sources told Business Standard that cane arrears of about Rs 11,000 crore were still pending on the UP mills for the 2019-20 crushing season, when cane worth more than Rs 32,000 crore was procured from the farmers.

Recently, UP's additional chief secretary, sugar industry and sugarcane, Sanjay Bhoosreddy said the mills had paid cent per cent of the cane arrears totalling Rs 33,048 crore for the previous 2018-19 crushing season.

Last week, the Adityanath government also announced a financial package of Rs 500 crore for cooperative mills to settle their outstanding for the 2019-20 season. The money would be provided to the 24 state run cooperative mills as loan, which would then be transferred directly into the bank accounts of the beneficiary farmers.

“The state is sensitive towards the sugarcane farmers and as such Rs 500 crore has been released for cooperative mills for making prompt payment,” Bhoosreddy had said.

“In spite of sugar sale remaining negligible during the lockdown, cane payments worth Rs 5,954 crore were made to farmers. In this payment, the decision to tag the sale price of ethanol and sanitiser for cane price payment was important,” he noted.

According to the state government, total cane payments by the UP's private and public sector mills during the three and half years of Adityanath's term amount to nearly Rs 1.03 trillion. This includes cane outstanding on mills for the previous crushing seasons. Adityanath became the chief minister of UP on March 19, 2017.

In the last three years, the state of UP logged more than 326 million tonnes (MT) of cane crushing and 36.5 MT of sugar production by all the mills. In the 2019-20 season, cane crushing of 111.8 MT and sugar production of 12.6 MT was registered, the highest ever in the state.

During the Covid-19 lockdown, when most industries in UP and other states were dysfunctional, only the UP sugar mills continued with crushing operations.