UP assures settlement of over Rs 4,000-cr cane dues

The Uttar Pradesh government has assured farmers of settlement of their sugarcane dues totalling over Rs 4,000 crore in the next two months.

Yesterday, hundreds of farmers had gathered at the state cane commissioner Kamran Rizvi’s office demanding settlement of their cane arrears for 2006-07 and 2007-08 crushing seasons, estimated at over Rs 1,000 crore.

They also pressed for early payment of cane dues pertaining to the current crushing season that has already breached the Rs 3,200-crore mark. “The farmers were demanding settlement of cane arrears. We held a dialogue with them assuring that all dues would be cleared within the next two months, which pacified them,” Rizvi told Business Standard.

On January 17, 2012, the Supreme Court had directed UP sugar producers to clear cane price differential for 2006-07 and 2007-08 within three months. Earlier, the mills had got an interim relief in 2007-08 to pay cane price at a rate lower by Rs 15 per quintal vis-à-vis the state advised price (SAP). Similar relief was granted in 2006-07 by way of the apex court upholding the decision of the Allahabad High Court. This relief was vacated by the Supreme Court in January.

UP sugar production stands at about 6.8 million tonnes (mt) with over 70 of the 125 sugar mills already closed.

Rizvi said cane production this year could even touch 7.1 mt, a feat considering the state had earlier pegged its target under 6.5 mt for 2011-12. The mills had crushed almost 75 mt of sugarcane. Dues of farmers total Rs 17,650 crore. Since mills get 14 days to clear dues, the arrears stood at Rs 16,440 crore, of which the mills had cleared Rs 13,180 crore.

On November 8, 2011, UP had hiked SAP by almost 20 per cent. The price of early variety of cane was increased Rs 40/quintal to Rs 250/quintal, while that of common variety was raised by Rs 35/quintal to Rs 240/quintal.