UP mills clear Rs 5,800cr cane dues to farmers

While sugar production in Uttar Pradesh dipped to a new low of nearly 4 million tonne this crushing season, the sugarcane payment scenario, on the other hand, has been a welcome change for the state farmers.

So far, almost 95 per cent cane dues had been settled by 132 sugar mills including private mills, cooperative units and those belonging to the UP Sugar Corporation. The mills made payments of Rs 5,800 crore to the farmers, as against the total cane dues of Rs 6,293 crore in 2008-09. Interestingly, the state advised price (SAP) for cane was higher this season at Rs 140 for general variety, up from Rs 125 in the previous year.

“The payment schedules have been good, since there was scarcity of cane for crushing and the mills had even made advance payments to farmers to procure as much cane as possible,” a senior cane department official told Business Standard, adding 100 per cent dues would be liquidated in the days to come.

Sugarcane production dipped almost 30 per cent at 110 million tonne due to a fall in acreage, which is estimated at 2.1 million hectare. Farmers have turned to other lucrative foodgrains and oilseed crops. Besides, the cane payments were delayed in the previous years due to multiple court cases over the cane price. In 2006-07 and 2007-08, the state sugar production stood at 8.5 and 7.4 million tonne respectively.

About Rs 70 crore cane dues relating to previous years is still pending. Mostly, these pertain to cases under the purview of the Board for Industrial & Financial Reconstruction (BIFR), the official said.

Meanwhile, all the 132 sugar mills that participated in cane crushing this season have closed. The mills crushed over 45 million tonne of cane this season and the sugar recovery was clocked at 8.9 per cent. With the annual consumption of sugar in UP being about 5 million tonne, retail prices have already shot up to Rs 28 per kg.