Cane dues: UP plans to extend Rs 4,000 cr soft loan to sugar mills

Ahead of the 2019 general elections, Bharatiya Janata Party-ruled Uttar Pradesh plans to extend Rs 4,000 crore of soft loan to sugar mills to help them clear sugarcane farmers' dues, which stand at about Rs 4,700 crore currently.

The state government provided a soft loan worth Rs 4,000 crore in the last season (October-September) when the cane arrear was as high as Rs 34,400 crore. The loan was provided at five per cent interest rate of sugar mills.

"Out of the total dues, last season's cane arrear has come down to Rs 1,700 crore. This season's dues till December are about Rs 3,000 crore. We have kept a target for sugar mills to clear the dues in a speedy manner," Uttar Pradesh Cane Development Minister Suresh Rana told PTI on the sidelines of an event.

During the last season, some mills were able to clear the cane payment to farmers by taking advantage of the soft loan. The sugar industry is demanding the government to extend the same soft loan to this season as well, he said.

"Farmers are on the priority list of the government. If mills want to avail the soft loan, we will extend it, provided they keep ready the matching grant," Rana said.

The minister said that out of the Rs 4,000 crore worth of soft loan, about Rs 1,700 crore was disbursed to sugar mills so far. The loan instalment started from July 2018 and repayment will begin from July this year.

Meanwhile, the government has taken steps against millers defaulting on payment of cane price to farmers. First Information Reports (FIRs) have been filed against two-three millers in the state for pending cane dues, he said.

"The government is taking stringent action against the mills. The government wants that no farmers suffer any kind of problem," he added.

Rana further said the BJP-led state government has taken steps to clear Rs 33,700 crore cane arrears, which is more than Rs 18,000 crore dues that were cleared during the Samajwadi Party government in 2015-16.

Sugar mills in Uttar Pradesh, the country's largest sugar producing state, have manufactured 31 lakh tonnes of the sweetener till December of this season. The crushing is still going on, as per the industry data.