Cane arrears: UP govt holding 3 million tonnes of sugar for auction

Uttar Pradesh government has been holding 3 million tonnes of sugar stock seized from the private millers following the latter's inability to clear sugarcane arrears.

However, the state government has so far been unable to auction the stock due to various reasons, including uninterested buyers and the 'kanwar mela' in western UP, where majority of the mills are situated.

The 95 private sugar mills have collectively paid nearly Rs 11,765 crore against the total dues of Rs 17,366 crore for cane purchased during the 2013-14 crushing season; implying settlement of 68 percent of arrears.

Since, Allahabad High Court is hearing a case pertaining to arrears, the government had so far registered over 60 First Information Reports (FIR) and issued Recovery Certificates (RCs) against 52 mills.

Pursuant to RCs issued by the state cane commissioner, the respective district administration had seized the sugar stock for auction, so that farmers' dues could be settled.

In its affidavit filed in the HC today, the state informed the court that as a result of the confiscation of sugar stocks of private mills, there was a ready stock of about 2.98 million tonnes of sugar to be auctioned in the market. Besides, sugar belonging to the cooperative mills estimated at 0.23 million tonnes was also available.

The government apprised the court that the occupiers of mills had sold about 0.53 million tonnes of the seized sugar stock during July and the sale consideration had been released for farmers' payment.

The 23 cooperative mills had settled 88% of their dues; paying Rs 1,696 crore against dues of Rs 1,929 crore. The lone UP State Sugar Corporation Limited (UPSSCL) had settled all its dues of over Rs 92 crore.

This way, the aggregate cane arrears stand at Rs 5,835 crore, implying settlement percentage of 70%. All the 119 mills had paid Rs 13,553 crore against total dues of about Rs19,388 crore.

Meanwhile, the HC posted the case for next hearing on August 5. UP Sugar Mills Association (UPSMA) is slated to hold a meeting on August 4 to chart the future course of action.

During 2013-14 crushing season, UP sugar output has dropped by 13% to about 6.42 million tonnes (MT).

UP sugar sector is estimated at Rs 30,000 crore and represents the largest organised industry. Sugarcane farming supports the livelihood of over 4 million farmers.