UP's private sugar mills taste bitter pill

60-65 FIRs filed against mills for under-weighing, non-payment of cane dues

Uttar Pradesh’s (UP) private sugar mills are faced with the double whammy of mounting sugarcane arrears and police cases pertaining to under-weighing and dues.

While the sugarcane arrears of the 2012-13 crushing season have crossed Rs 6,150 crore, about 60-65 first information reports (FIRs) had been filed against the mills for under-weighing and non-payment of cane dues.

Majority of the FIRs pertain to under-weighing during the procurement of sugarcane from farmers’ societies.

“Only eight to 10 cases have so far been lodged against the mills for the cane arrears,” a senior cane department official told Business Standard. Such FIRs had been lodged in Moradabad, Meerut, Muzaffarnagar and Baghpat districts.

He added if the mills failed to clear the dues “beyond a point”, recovery certificates (RCs) would be issued against the defaulters and the sugar and molasses stocks could be seized by the district administration for liquidation to settle the outstanding.

Under RCs, 10 per cent additional recovery is made as a penalty, which is then deposited with the respective tehsil treasury.

“However, the issuance of RCs would be the last resort and we are confident that the mills have sufficient stocks with them to clear the dues,” the official said.

State Cane Commissioner Kamran Rizvi has already issued notices to all the mills regarding arrears and related issues. He had held some meetings with the individual mills and more such meetings would be convened soon.

Meanwhile, more than 70 mills have closed down in UP, while 50-odd mills are still crushing. According to the latest data, mills had produced 7.35 million tonnes (mt) of sugar after crushing almost 80 mt of sugarcane, with recovery percentage at 9.19 per cent.

The crushing season is likely to wrap up by the end of this month or latest by the first week of May 2013.

The total dues of the state mills stand at Rs 22,050 crore, while the payable amount is Rs 20,729 crore, since the mills get 14 days to settle dues without inviting interest penalty. The mills had paid Rs 14,577 crore, after which arrears stand at Rs 6,152 crore.