UP sugar crisis reaches union food minister Ram Vilas Paswan's doorsteps

Cane dues at Rs 22 bn even after expiry of Nov 30 deadline; State minister Suresh Rana writes to Paswan for immediate relief

With sugarcane outstandings for the 2017-18 crushing season floating above Rs 22 billion, even after the expiry of the November 30 deadline set by chief minister Yogi Adityanath, the sugar crisis has now reached the doorsteps of union food minister Ram Vilas Paswan.

UP sugarcane and sugar development minister Suresh Rana, who also holds the portfolio of minister of state for industrial development, has written to Paswan seeking immediate relief in the form of increasing the state sugar sale quota to 1.1 million tonnes (MT) and hiking the floor ex-factory sugar sale price from Rs 2,900/quintal to Rs 3,250/quintal.

According to sources, Adityanath could later this week write a letter to the Prime Minister’s Office (PMO) for expediting relief in this matter. The sugarcane sector directly impacts four million farmers and generates direct economy worth almost Rs 500 billion through sugar, jaggery, ethanol, bagasse, and cogeneration.

A few weeks back, UP sugarcane commissioner Sanjay Bhoosreddy wrote a similar letter to the food secretary. Since there was no development on this front, the UP sugarcane minister wrote a fresh letter to Paswan to draw his attention on the vexed issue, which could aggravate the payment crisis in the current season.

In his letter, Rana mentioned that currently, the state mills had unsold inventory of 96,000 tonnes pertaining to 2017-18, when UP had produced over 12 MT of sugar. During the current season underway, the state mills are expected to produce 12.5 MT of sugar, of which the export quota is pegged at 1.75 MT.

In this way, the availability of sugar with UP mills is estimated at 11.7 MT after adding fresh production (12.5 MT) and carryover stock (96,000 tonnes), while deducing the export quota (1.75 MT). 

Considering, 12 months between Dec 2018 and Nov 2017, the state would need monthly sugar sale quota of 1.1 MT to clear the stocks and facilitate prompt payments.

Recently, the state government had filed FIRs under Section 3/7 of the Essential Commodities Act (ECA) against seven private sugar mills -- Malakpur, Walterganj, Bisauli, Brijnathpur, Gagalheri, Bulandsahar and Gadaura.

FIRs had been already been lodged against the sugar mills, including Malakpur and Modinagar (Modi Group) and Brijnathpur and Simbhawali (Simbhawali Group) over sugarcane arrears and under-weighment during the 2017-18 crushing season. The district administration had also seized the Modi group's sugar stocks over non-payment of dues.

Recovery certificates (RC) have been issued against nine mills with highest cane outstanding, namely Malakpur, Walterganj, Modinagar, Bisauli, Brijnathpur, Gagalheri , Bulandsahar, Chilwaria and Gadaura. These mills belong to Bajaj Hindusthan, Simbhaoli, Wave and Modi Groups among others.

The RC empowers the district magistrate to seize the movable and immovable properties of these sugar mills to recover arrears through the auction.