Mills yet to pay Rs 122 cr to sugarcane farmers

The Indian sugar mills are yet to pay Rs 122.31 crore to farmers for the sugarcane purchased since 2006-07, even as their profit margin went up following rise in sugar prices.

According to the latest official data, sugar mills in the private sector owe Rs 92.87 crore, while cooperative factories Rs 29.40 crore and public sector units only Rs 4,00,00.

This cane arrear since 2006-07 season also includes a due of about Rs 8.50 crore recorded in 2008-09 season which ended on September 30, a government official said.

"In 2008-09 season, mills in Uttar Pradesh are yet to clear Rs 4.13 crore, while Maharashtra mills still need to pay Rs 4.25 crore to the farmers," the official said.

Maharashtra and UP are the two leading producers of sugar sharing more than 60 per cent in the country's overall output.

According to the quarterly results of most of the sugar companies, the net profit has turned positive in 2008-09, while in the previous season they incurred losses. The turnaround is attributed to better realisation as the country produced 15 million tonnes of sugar against a demand size of 22.5 million tonnes.

Sugar prices have increased to Rs 35 a kg from a level of Rs 17-18 a kg in September, 2008.

Meanwhile, as the 2009-10 season began from October 1, farm leaders fear that cane arrears would force growers to sell sugarcane to 'gur' and 'khandsari' (jaggery) makers, who immediately make the payment.