Cane arrears: High court to hear case today

The payment percentages of private and cooperative mills stand at over 66% and 91% respectively

The Allahabad High Court will hear a case pertaining to cane arrears on Uttar Pradesh sugar mills on Thursday. The state government has been mounting pressure on private mills for early payment.

The private mills have to pay Rs 5,900 crore. About 95 units have collectively paid nearly Rs 11,462 crore to cane farmers, against total dues of Rs 17,366 crore.

The payment situation is better as far as the 23 cooperative sector mills are concerned. They have settled arrears of Rs 1,640 crore against dues of Rs 1,929 crore.

This way, the payment percentages of private and cooperative mills stand at over 66 per cent and 91 per cent respectively.

Hearing the case on July 1, the high court had issued a notice to the Centre over arrears on the petition filed by the Rashtriya Kisan Mazdoor Sangathan (RKMS) and posted the matter for hearing on July 24. It had directed the state government to ensure that farmers get the money for cane and also take steps for recovery of the arrears.

So far, the government had registered at least 57 first information reports (FIRs) and issued recovery certificates (RCs) against 49 mills for failing to settle dues.

Earlier this month, the private mills had put the Akhilesh Yadav government on notice, warning of suspending crushing operations in the 2014-15 season, if their demands were not met within a stipulated time.

The mills had demanded the state announce by July 23 the subsidy of Rs 9 a quintal of cane, as promised last year. This was to be provided to mills against the cane price of the 2013-14 season.

Besides, the mills want Uttar Pradesh to adopt by July 31 the linkage formula, which would determine future cane price at 75 per cent of the revenue realised from sugar.

They had also demanded that "coercive" action — including filing FIRs, issuing RCs and seizure of sugar stock — be stopped.

The sugar sector in the state is estimated at Rs 30,000 crore and represents the largest organised industry. Sugarcane farming supports the livelihood of over four million farmers. While Karnataka, Maharashtra and Gujarat follow a revenue sharing system for cane pricing, UP had dragged its feet. This has made private mills in the state face operating losses over successive seasons.

During 2013-14, UP had retained the state cane price at Rs 280 a quintal for the common variety, while the mills claimed their paying capacity stood at around Rs 225 a quintal. Any price beyond it would result in arrears and losses to the industry.