Yogi sets Nov 30 deadline for sugar mills to settle dues of Rs 86 bn

UP CM says Rs 40 billion soft loan for private mills will only be available to those whose payment ratio exceeds 30% for the last crushing season

Uttar Pradesh chief minister Yogi Adityanath on Tuesday set November 30 as the deadline for private sugar millers to settle cane dues of more than Rs 86 billion for the 2017-18 crushing season.

Against total dues of over Rs 354 billion, the net outstanding of all UP sugar mills currently stands at about Rs 95 billion, of which private mills have been bogged down by payables of Rs 86.83 billion. The remaining portion of Rs 8.87 billion is owed by the 24 cooperative sector units in the state.

“We have set the deadline of November 30 for mills to settle arrears. The next crushing season would also start by the end of October,” Adityanath said, addressing the media in Lucknow after the state cabinet meeting. He mentioned the sugarcane area had increased in the state and recovery had also improved significantly ahead of the next season.

In the recently passed supplementary budget, the state government had proposed to advance Rs 40 billion as soft loan to private mills to pay farmers. “However, the soft loan would be offered only to those private mills whose payment ratio is more than 30 per cent for the last crushing season,” he announced.

Of the total 94 private sector mills in UP, 63 had achieved ‘good payment’ ratio of 73-80 per cent, he said, adding these units had assured they would settle the remaining component soon.

“About 42 other mills have clocked payment ratio of more than 50 per cent, while nine mills have achieved payment ratio of less than 50 per cent,” the CM added.

The soft loan would be offered for five years and attract interest payment of 5 per cent, he said. However, the defaulting mills would have to cough up interest payment at the rate of 12 per cent.

Meanwhile, Adityanath mentioned the domestic sugar sector had been passing through challenging times owing to the crashing of international sugar prices.

The CM said the state government would support private mills desirous of producing ethanol directly from cane juice to diversify beyond sugar. “The Centre has already increased ethanol prices to encourage private producers. The state government had earlier sent a proposal to this effect to the Centre, which has been accepted,” he claimed.

Adityanath asserted that sugarcane farmers would continue to witness good times going forward due to the proactive stance of the government and promotion of other allied sectors, including khandsari and ethanol to supplement sugar production.

Meanwhile, the cabinet approved incentive of Rs 4.50 per quintal to mills for easing their payment ratios. This would put additional burden of Rs 5 billion on the exchequer. However, this amount would be directly transferred to the farmers’ accounts.

Earlier, the UP private mills had expressed unwillingness to operate in the coming season over massive outstanding.