UP government releases Rs 200 cr for payment of sugarcane arrears

UP mills, mostly private, have outstanding worth nearly Rs 2,000 crore

Uttar Pradesh government has released Rs 200 crore for the payment of sugarcane arrears by state controlled co-operative sector sugar mills for the previous 2018-19 crushing season.

While, four of the total 24 cooperative units had settled their outstanding, the remaining 20 accounted for the unpaid arrears, UP cane and sugar commissioner Sanjay Bhoosreddy said on Wednesday.

He said that the government had released Rs 200 crore for clearing the outstanding cane price payment and the amount would be transferred to the farmers’ bank accounts within the next two days.

Bhoosreddy underlined the government had accorded priority to ensuring the payment of cane price to the state farmers.

Even as the 2019-20 crushing season is underway, cane arrears of nearly Rs 2,000 crore are pending on UP mills for the 2018-19 season. While private millers account for 85 per cent of the outstanding, the bulk of arrears are owed by units of big players viz. Bajaj Hindusthan, Modi and Simbhaoli groups.

Till Friday, the private mills had about Rs 1,700 crore of the total arrears worth Rs 2,000 crore, while the cooperative units owed an outstanding of Rs 300 crore.

UP sugarcane development and sugar industries minister Suresh Rana had earlier told Business Standard he would convene a meeting with the management of the defaulting mills and ask them to clear cane dues.

Last year, the Adityanath government had filed police cases against several defaulting mills, including those owned by Bajaj Hindusthan, Modi and Wave Groups.

The first information reports (FIR) were lodged under section 3/7 of the Essential Commodities Act (ECA) 1955 and section 420 and 120 (B) Indian Penal Code (IPC).

Besides, recovery certificates (RC) were issued against a few others. The RC entitles the respective district administration to seize movable and immovable properties, including sugar stock, for auction, so that the liabilities are settled.

The mills had collectively settled over Rs 31,000 crore worth of sugarcane payments out of a total outstanding of Rs 33,048 crore for 2018-19 crushing season with the private and co-operative sector millers accounting for Rs 28,000 crore and Rs 2,600 crore of the payments, respectively.

Rana stressed cane payments of more than Rs 80,000 crore had been made over the past 33 months of the current regime, which was unprecedented in UP and indicated the pro-farmer stance of the government.

In 2018-19, 119 sugar mills, including 94 private, 24 cooperative and a UP State Sugar Corporation unit, had participated in crushing operations with the sugar output totalling 11.8 million tonnes (MT) compared to over 12 MT in 2017-18.

UP, which is India’s top sugar producer, has witnessed cane area shrinkage of more than 4% to 2.68 million hectares (MH) for the coming 2019-20 crushing season from 2.8 MH in the last season.