UP heat on sugar mills over arrears

State govt has started process of registering FIRs and issuing recovery certificates against defaulting mills

Last year, the UP government had retained the state advised price for cane at Rs 280/qtl. The mills had been allowed to pay Rs 260/qtl upfront and the remaining Rs 20/qtl later

After the Allahabad High Court rap over massive arrears on payments to farmers for sugarcane sales of about Rs 8,500 crore, the Uttar Pradesh government has turned the heat on private sugar mills. The government has started the process of registering First Information Reports (FIR) and issuing Recovery Certificates (RCs) against defaulting mills.

UP cane commissioner Subhash Chandra Sharma told Business Standard 36 FIRs had been lodged and 13 RCs issued against defaulting units. An RC empowers the district administration to seize assets for recovery. The actual action depends upon the amount to be recovered.

“I have convened a meeting of all mills in the private and cooperative sector tomorrow to discuss the payment issue,” he said, adding that mills were “cooperating” and had assured about settling the payment.

On May 30, 2014, a bench of the court had pulled up the state dispensation for failing to ensuring payment of cane dues. It directed the government for settlement of arrears and the filing of an affidavit by the cane commissioner in July to this effect. The commissioner would be held responsible if arrears were not settled by then, the court had said. The petition was filed by Rashtriya Kisan Mazdoor Sangathan.

A delegation of cane societies met Sharma here on Wednesday to seek prompt payment of dues. These societies act as interfaces between mills and farmers. Last year, the UP government had retained a State Advised Price for cane at Rs 280/quintal. The mills had been allowed to pay Rs 260/qtl upfront and the remaining Rs 20/qtl later.

During the 2013-14 crushing season, UP’s sugar output dropped 13 per cent to 6.42 million tonnes. In 2011-12 and 2012-13, this was 6.97 mt and 7.4 mt, respectively.

Last year, Indian Sugar Mills Association had projected a sugar production of 6.6 mt in UP for the current season.