Rs 4,700 crore arrears: UP demands higher sale quota for sugar mills

UP cane minister to meet union food minister Ram Vilas Paswan soon

With the 2019-20 cane crushing season less than a month away, and last year’s payment arrears of Rs 4,700 crore, the Uttar Pradesh government will ask the central government to approve a higher monthly sale quota for sugar mills in the state.

Currently, the quota is about 700,000 tonnes a month, reckoned as impeding the capacity of private millers to settle arrears.

Of the total payables of Rs 33,048 crore for the 2018-19 crushing season, the pending dues to farmers of Rs 4,700 crore is nearly 15 per cent of mills’ net payment commitment. Of these, private mills account for the bulk, Rs 4,370 crore. Government-controlled cooperative mills owe Rs 335 crore. The lone mill of the UP State Sugar Corporation (UPSSC) owes Rs 34 crore.

“We will urge the Centre to increase the sale quota of UP mills, considering the arrears position in the state. I am planning to meet Union food minister Ram Vilas Paswan in this regard soon,” sugarcane development and sugar industries minister Suresh Rana told Business Standard.

He said the defaulting millers had expressed inability to settle the dues, owing to their unsold sugar stock. The state government and private millers have long been demanding a higher quota for UP mills.

“We are targeting 100 per cent settlement of arrears by the end of October,” Rana said, while underlining that strict action would be taken against defaulters.

He further said UP Power Corporation owed about Rs 1,000 crore to the state’s private mills, for buying of co-generated power. “We will also request the chief minister to facilitate this payment, in the interests of farmers.”

The cane department is also likely to seek a special package of at least Rs 300 crore from the government for settling cane dues on co-operative mills. Last year, the Adityanath government had allocated Rs 500 crore to the co-operative units for paying farmers’ arrears.

Rana said western UP mills would start crushing after Diwali. Progressing towards eastern UP, all mills would be operational by the middle of November.

Earlier, the state had filed police cases against nine mills, including those operated by the Bajaj Hindusthan, Modi and Wave Groups, over sluggish payments. 

These were filed under the stringent sections 3/7 of the Essential Commodities Act and sections 420 and 120 (B) of the Indian Penal Code.

Besides, recovery certificates were also issued against them. These entitle a district administration to seize movable and immovable properties, including sugar stock, for auction, so that the liabilities are settled. 

In the 2018-19 season, 119 mills in UP -- 94 private, 24 co-operative and the UPSSC unit -- had participated in crushing of cane. The state’s sugar output was 11.8 million tonnes, compared to a little over 12 mt in 2017-18. This year, the government expects 121 mills to crush cane.