Akhilesh holds talks with UP private sugar millers

The meet expected to end deadlock over suspension of crushing operations by 99 private mills, which crush over 80% of total sugarcane crushed UP

Uttar Pradesh chief minister Akhilesh Yadav today confabulated with key private sugar mill owners here to ease impasse in the state sugar sector.

The closed door meeting took place in the evening and later the millers proceeded for a private to discuss the emerging situation. Later, Yadav was also said to have discussed the sticky issue at length with senior government officials.

The outcome of the meeting was still unknown at the time of filing this report. However, it is expected that the government would offer some sops to sugar industry for crushing this season.

All eyes had been set on the meeting to break the dead lock, which has ensured suspension of crushing operations by 99 private mills, which crush over 80% of the total sugarcane crushed UP.

The delay in crushing operations caused consternation amongst the 4 million sugarcane farmers in UP, which produces a third of India’s sugar output. The farmers have been agitating in western UP for early start of crushing. They have been demonstrating at mill gates to press for their demand.

Sugar is the largest agri-based sector in UP, whose economy is pegged at almost Rs 35,000 crore annually.

The sugar crisis is also delaying wheat sowing and posing problems of cattle fodder for farmers. There is also the danger of law and order situation going out of hand, given that Rs 2,400 crore of cane arrears is due on private millers for the last season.

The genesis of the crisis lay in the alleged higher cane price in up vis-à-vis sugar prices. The mills want rationalisation of cane price, which they claim had been bleeding them financially over the years.

They want implementation of Rangarajan Committee recommendations in sugar sector and had made amply clear that any cane price above Rs 225/quintal was beyond their paying capacity in the current circumstances.

On the other hand, the farmers had been drumbeating for cane price of almost Rs 350/quintal given steep hike in input costs viz. fuel, farm labour, fertiliser, power etc.

On November 19 and 20, about 75 mills notified the government about suspension of crushing operations due to unviable conditions.

Taking a safe middle path, the state had on November 20 retained the state advised price (SAP) of Rs 280/quintal for the current 2013-14 crushing season.

However, the announcement disappointed both the farmer and private millers. The private mills did not budge from their stand, even as the deadline for western UP mills to start crushing expired on November 25.