UP co-op sugar mills lead in payments

Co-operative mills contribute 10 per cent to UP's sugar sector

The co-operative sugar mills in Uttar Pradesh are leading their private sector counterparts in settling farmers’ cane payments.

While the aggregate payment percentage achieved by 23 operational co-operative mills is 64 per cent, the corresponding figure notched up by the 95 private units is a shade above 48 per cent – a difference of over 15 per cent.

Besides, the private mills also have to clear about Rs 1,850 crore in arrears pertaining to the 2012-13 crushing season.

“We have put a system in place wherein we pledge our fresh stock of sugar with the co-operative banks. The money received from the banks is then paid to farmers,” Uttar Pradesh Co-operative Sugar Factories Federation Limited Managing Director B K Yadav told Business Standard.

The co-operative mills further try to pay farmers upfront as far as possible without waiting for the 14-days window provided for payments, he informed. The sugar mills are given a time of two weeks to clear the dues.

In absolute terms, the co-operative mills have so far paid Rs 260 crore against dues of Rs 408 crore. Similarly, the private mills have paid Rs 1,036 crore against dues of Rs 2,152 crore.

The UP State Sugar Corporation Limited mill has paid Rs 6 crore against dues Rs 11.72 crore.

The co-operative mills contribute 10 per cent to the state’s sugar sector, which is dominated by private units both in number and crushing capacity.

Last year, the federation had received Rs 670 crore in financial support from the state government, for settlement of arrears and upgrading and maintenance.

Meanwhile, UP mills had collectively produced nearly 1.65 million tonnes (mt) of sugar by crushing 18.70 mt of cane. During 2011-12 and 2012-13, UP sugar production stood at 6.97 mt and 7.47 mt, respectively.

This year, the state cane price stands at Rs 280 a quintal, but the millers have been allowed to pay in installments of Rs 260 and Rs 20 per quintal.