No govt help yet for sugar mills; HC hearing today

Mills are saddled with Rs 5,900 crore worth of arrears for 2013-14 crushing season

Sugar mills in Uttar Pradesh continue to face the tight situation of lack of money to pay farmers for past cane purchases, plus a refusal by the state government to help, added to the threat of penalties for not clearing their arrears.

The mills have Rs 5,900 crore of payment arrears for the 2013-14 crushing season. They’d threatened to suspend operations in the 2014-15 season unless the state  accepted their demands for a subsidy of Rs 9 a quintal for last year’s cane and linking the future price to the revenue realised from sugar sales. They’d given deadlines of July 23 and July 31, respectively, which the government has ignored so far.

There is little hope that the state government would adopt the ‘linkage formula’ for cane prices. Last year, the government had said a committee under the chief secretary would discuss and decide on the issue. It is still to give a report.

“The government is yet to react on our several representations and meetings on this important issue, which concerns both industry and cane farmers,” UP Sugar Mills Association secretary Deepak Guptara told Business Standard. The Association has called a meeting of members to consider what to do.

Earlier, the central government had announced interest-free loans to mills to tide over the arrears’ crisis. The promised relief is yet to come on the ground. And, on Monday, UP cane commissioner Subhash Sharma had told mill representatives not to depend on the possibility of central interest-free loans but to find ways of settling their dues.

So far, the government has registered 57 First Information Reports with the police and issued Recovery Certificates against 49 mills over the arrears. The sugar stock of several mills have been seized for auction.

The Allahabad high court was to have had a hearing on the issue but has deferred this till Friday. On July 1, the HC had issued a notice to the Centre over the arrears, on a petition filed by Rashtriya Kisan Mazdoor Sangathan.  It had directed the state government to ensure farmers’ cane payment and take steps for recovery of arrears to a “logical conclusion”.