UP sugar mills owe Rs 5,795 cr to cane farmers despite lucrative prices

92% of these dues were from corporate sector; more than half owed by just four companies

Sugarcane payment arrears to farmers in Uttar Pradesh stood at Rs 5,795 crore till last Friday, despite lucrative sugar prices this time, indicating that the benefits of a good year for the sector don't necessarily trickle down to growers.

The ongoing 2016-17 sugar season, which started on October 1, will go on till September-end 2017.

As much as Rs 5,320 crore, or 92 per cent of these arrears of Rs 5,795 crore, was owed by the corporate sector. About 55 per cent of all dues are payable by only four companies.

Farmers are to be paid for their cane within 14 days. Non-payment beyond this deadline comes under the category of dues. So far this season, Rs 16,894 crore was payable in UP; till last week, Rs 11,098 crore or 66 per cent was cleared. The state has 116 mills in operation, of which 91 are in the private sector, 24 are cooperative and one is a state entity.

At the national level, mills owed farmers as much as Rs 9,649 crore as on February 1. Karnataka takes second spot in arrears, with Rs 910 crore owed to farmers in that state, followed by Gujarat (Rs 455 crore), Tamil Nadu (Rs 400 crore) and Maharashtra (Rs 363 crore). In these states, arrears are calculated on the basis of the 'Fair and Remunerative Price' recommended by the central government and accepted by the respective governments. UP has fixed a higher rate for its growers.

Sugar production in 2016-17 is estimated at a little over 22 million tonnes by the government. Private traders think it might not exceed 20 million tonnes. The ex-mill price is currently Rs 36-37 a kg.