UP to put pressure on sugar mills to clear arrears of Rs 2,000 crore

Bulk of cane outstanding on Bajaj Hindusthan, Modi, Simbhaoli groups

Even as the 2019-20 sugarcane crushing season is gaining momentum, farmers' arrears of about Rs 2,000 crore are still pending on sugar mills in Uttar Pradesh for the previous 2018-19 sugar season.

While the private millers' account for 85 per cent of the outstanding, the bulk of arrears are owed by the units operated by big players viz. Bajaj Hindusthan, Modi and Simbhaoli groups.

According to official figures, the private mills owe about Rs 1,700 crore of the total arrears worth Rs 2,000 crore, and the government controlled cooperative units have outstanding of nearly Rs 300 crore.

UP sugarcane development and sugar industries minister Suresh Rana said the UP mills had already settled 94 per cent of the cane payables for the 2018-19 crushing season.

“We will convene a meeting with the management of the defaulting mills, especially Bajaj Hindusthan, Modi and Simbhaoli groups and ask them to clear their sugarcane dues,” he told Business Standard here.

Last year, the Yogi 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 also 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.

Meanwhile, the UP mills had collectively settled more than Rs 31,000 crore worth of sugar cane payments out of the total outstanding of Rs 33,048 crore for 2018-19 crushing season with the private and cooperative sector millers accounting for Rs 28,000 crore and Rs 2,600 crore of the payments respectively.

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

He also informed that 21 sugar mills were already producing ethanol with ‘B’ heavy molasses and going forward, the government aimed at integrating all the sugar factories with ethanol production capacity to insulate the sector from the cyclical nature of the sugar industry and provide a viable economic value chain.

In 2018-19 crushing season, total of 119 UP 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.

Meanwhile, 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.