UP adopts tough posturing over sugarcane dues

Sugar mills promise to clear dues of Rs 585 crore by June 15

The Uttar Pradesh government is preparing to act tough against the private sugar millers over pending dues of Rs 585 crore for the 2009-10 crushing season.

Earlier, Recovery Certificates (RCs) had been issued against some mills for their failure to clear dues in the stipulated time frame. The government is gearing up to pursue the RCs in right earnest.

As per the rules, a sugar mill has to clear the cane dues within 14 days, failing which interest on the outstanding amount is also payable.

According to sources, the private millers had been asked to submit tentative plans to the state sugarcane department for clearing the dues and they had reportedly assured to pay the outstanding amount by June 15.

If the millers fail to abide by their payment commitments, the cane commissioner is likely to issue directives to the respective district magistrates for taking action against the defaulters, official sources told Business Standard.

While, the UP State Sugar Corporation Limited (UPSSCL) and federation mills had cleared all their dues, some of the mills operating in the private sector still have some backlog payment due.

As per latest official statistics, against the total sugarcane dues of Rs 13,251 crore for the crushing season, farmers had been paid Rs 12,666 crore and dues of Rs 585 crore were pending on 8 odd private sugar units.

During 2009-10, a total of 128 UP mills, including 97 private units, had produced 5.162 million tonnes of sugar vis-à-vis 4 million tonnes in 2008-09. There are about 150 mills in the state, however, some of government-owned units are defunct.

Since, wholesale sugar prices had come down to about 2,800/quintal from the peak of Rs 4,700-4,800/quintal, the Cash Credit Limit (CCL) for the mills had stood adjusted accordingly affecting the cash flow for the private millers.