UP asks private sugar mills to start crushing by Nov 20

Uttar Pradesh government today asked the private sugar mills to start crushing by November 20.

With over 90 mills of the functional 115 odd sugar mills, the private sector accounts for the maximum number of units in the state.

At least four sugar mills have started functioning, two each from the private and cooperative sector.

UP chief secretary Alok Ranjan asked officials to ensure all the 23 cooperative sector units start their crushing operations even earlier, by November 15.

He was holding the State Advised Price (SAP) fixation committee meeting with the representatives of sugar mills and farmers. Against the cane Fair and Remunerative Price (FRP) fixed by the Centre every year, UP announces SAP, which is higher than FRP. This special cane price by some states has been challenged in the court by private millers as ultra vires.

This year, the UP farmers are demanding SAP of about Rs 350 per quintal, while the millers are adamant on fixing it according to their "paying capacity."

The private mills still carry massive farmers' arrears of about Rs 3,000 crore for the 2014-15 crushing season. The case pertaining to the delay in settling cane dues is being heard by the Allahabad High Court.

Meanwhile, a sugar industry official said the paying capacity of mills was only around Rs 190 per quintal calculated after taking the average between October 14 and September 15.

During the last season, the SAP stood at Rs 280 per quintal for common variety of sugarcane. The SAP has not been revised for the last three years, which has caused much consternation amongst farmers.

However, the mills have argued that due to falling retail sugar prices, glut in international market and lack of incentives, their paying capacity had suffered.

Now, the chief secretary-headed committee would recommend SAP to the state cabinet, which would take the final call on the cane price for the current crushing season 2015-16. The same is expected after Diwali.