UP sugar crisis defuses as mills ready to go for cane crushing

Signalling a coming resolution of the standoff between the government and private sugar millers in Uttar Pradesh, the latter decided on Monday to start maintenance work in their units from the morrow, for subsequent cane crushing.

There was a cordial meeting in the evening with the government's cane commissioner, who gave assurances of a response on some demands.

“We are confident about the resolution of the matter to the satisfaction of all stakeholders,” UP Sugar Mills Association secretary Deepak Guptara told Business Standard here.

There are 95 private mills in UP and two-thirds had earlier notified the state government about suspension of crushing in the coming season unless there was clarity on pricing. The government had also hardened its stand and directed mills to start crushing operations by November 10 and 15 in the western and eastern regions, respectively.

The mills had petitioned the Allahabad High Court for a direction to the government on the recommendation of a committee chaired by the chief secretary to devise a permanent cane price formula. They'd wanted a ‘participative mechanism’ to discuss the issue with mills before announcing the State Advised Price for the coming season. The next date of hearing is October 31.

Private mills owe farmers Rs 2,500 crore in arrears for the earlier crushing season; they say they have no money to clear these, owing to the government's irrational policies. With their refusal to start crushing, several farmers had begun distress sales of cane to khandsari and jaggery making units, at low prices.

In a meeting on Monday evening, cane secretary Rahul Bhatnagar assured mills a look into their genuine problems. Sources said the government had assured revocation of police cases for not clearing growers' dues and issuance of recovery certificates.

The mills have also demanded Rs 9/quintal of subsidy instead of Rs 6/quintal, and the government is to consider this.