Uttar Pradesh sugar mills owe Rs 2,000 cr to farmers

CM assures farmers that his govt would ensure full payment of arrears before next crushing season

Uttar Pradesh (UP) sugar mills stand owe at about Rs 2,000 crore to farmers although the state crushing season wrapped up several months back.

According to the latest data, of the Rs 2,000 crore, about Rs 1,600 crore was owed by the private mills, followed by the cooperative units. Settlement of cane arrears within 14 days of sale to mills was a pre-poll promise of the Bharatiya Janata Party (BJP) government in the run-up to the 2017 Assembly election.

Chief Minister Yogi Adityanath on Monday assured farmers that his government would ensure full payment of cane arrears before the next crushing season. Addressing a public meeting in Saharanpur district, Adityanath said the state government would strive towards an early settlement of farmers’ dues even as he lauded the efforts of state cane development and sugar industries minister Suresh Rana for facilitating the payments.

Adityanath had arrived in Saharanpur on Monday   to review the development and law and order situation in the border district. He left for Delhi in the evening.

Meanwhile, against the consolidated payables of Rs 25,386 crore, the mills had collectively paid Rs 23,387 crore, which leaves a little under Rs 2,000 crore as outstanding. Soon after assuming the office, Adityanath had warned the private millers to ensure payments within the stipulated duration.

Waiting for relief

• Sugar mills owe Rs 2,000 crore to farmers 

• Settlement of cane arrears within 14 days of sale to mills was a pre-poll promise of the BJP govt

• Erring mills have already been served fresh notices

• The sector suffers from cyclical nature of the industry 

• In the recently concluded season, UP topped in sugar production

• There are 116 sugar mills in the state, of which 91 belong to the private sector

Erring mills had already been served fresh notices and warned of issuance of the recovery certificates (RC) if they failed to comply. RCs authorise the district cane officers to seize unsold stocks and other assets of defaulting mills for auction to settle farmers’ payments. However, the erring units have still dragged their feet in fulfiling their obligation.

On April 20, a delegation of the UP Sugar Mills Association (UPSMA) had met Adityanath and submitted a memorandum urging for viable cane pricing and revenue sharing formula in the state to insulate the sector from pricing and cyclical fluctuations. No decision has so far been taken in this regard. The industry had also put forth its long-pending demand of de-reservation of molasses, a sugar byproduct, so that the mills’ profitability could increase and help speedier settlement of arrears.

The sector suffers from cyclical nature of the industry, which has been taking its toll on all the stakeholders. In the recently concluded crushing season, the state had topped domestic sugar production by clocking a record output of 8.75 million tonnes (mt) compared to 6.82 mt last year. 

It was a 40 per cent jump in production. There are 116 sugar mills in the state, of which 91 belong to the private sector, followed by cooperative sector at 24, while the UP State Sugar Corporation Limited (UPSSCL) accounts for a single operational mill.