Co-op mills start crushing as pvt players stay away

Two cooperative mills start operations

Amid the bitter crisis in the sugar sector of Uttar Pradesh, two cooperative sugar mills in Baghpat district have started crushing operations.

Private sugar mills, which form the bulk of the 124-odd mills in the state, stand firm they would not start crushing unless the government announced "a viable and affordable sugarcane price."

Meanwhile, the two cooperative mills had reportedly issued cane purchase indent of 100,000 quintals and 50,000 quintals, respectively.

The rest of the mills in the cooperative sector are likely to start crushing by the prescribed dates. While the units in the western and central regions had been directed to start crushing by November 25, the mills in eastern UP would start by November 30.

The respective district magistrates are the ex-officio chairperson of the cooperative units and the government always chips in to clear their sugarcane arrears.

Earlier, B K Yadav, managing director, UP Cooperative Sugar Factories Federation Limited, had said the units would stick to the timeline fixed by the state.

According to the cane department, Indian Potash Limited (IPL) had also assured the government that its five mills would start crushing by November end. IPL had procured sugar corporation mills during the Mayawati regime.

On November 11, Chief Minister Akhilesh Yadav had directed the private mills to start crushing starting from November 20. He had also asked officials to take action against the defaulters.

However, private millers seem in no mood to relent and have in fact toughened their stand. They maintain if the government failed to declare affordable cane price at the earliest in accordance with their paying capacity, they would be within their legal rights not to start crushing. Last year, the state cane price of Rs 280/quintal was announced on December 7. The private mills claim they have been incurring losses over the last few years due to high cane price vis-à-vis sugar prices. Arrears of over Rs 2,300 crore pertaining to 2012-13 crushing season are still pending on private mills.

Now, they claim cane price above Rs 225/quintal would result in losses. On the other hand, the farmers want cane price of almost Rs 350/quintal.

UP accounts for 30 per cent of India's annual sugar output and supports over 4 million cultivators' families. Sugar represents the largest organised sector in UP and accounts for almost Rs 30,000 crore economy. The state cane acreage is estimated at 2.4 million hectares.