Take over the defaulting sugar mills: Sanjeev Balyan to UP govt

Concerned over Rs 2,100 crore cane arrears in Uttar Pradesh, Minister of State for Agriculture Sanjeev Balyan on Monday said the state government should take over the defaulting sugar mills and arrest their owners.

At present, total cane arrears in Uttar Pradesh stands at about Rs 2,118 crore. Out of which, a maximum due of Rs 1,800 crore belongs to just four sugar mills.

"Cane arrears is a big issue in UP. Four mills — Mawana, Modi, Simbhaoli and Rana Sugars — owe Rs 1,800 crore dues to cane growers. The defaulting mill owners should be arrested. The UP government should takeover such mills. The central government is ready to help them in this regard," Balyan told reporters in New Delhi.

The state government is not taking stringent action against defaulting mills despite law in place, he said, adding that if the government takes over one mill, the rest will start making payment to farmers.

The sugar rates now are at a favourable level for mills and they should have made payments promptly. Bajaj Hindustan had cleared 50% of the dues, while others are yet to make, he added.

Balyan, who is a Bharatiya Janata Party parliamentarian from Muzaffarnagar, said the state government has not taken any action despite writing several letters.

According to the industry players, the four mills have not been able to clear cane arrears because they did not get working capital from banks. They would be able to clear dues after they sell sugar in the market.

The cash crunch of these mills has aggravated with the state government not yet clearing their power dues. These mills were not given soft loan last year.

Sugar production in Uttar Pradesh, the second largest producing state, is estimated to decline to 6.8 million tonnes in 2015-16 marketing year (October-September) from 7.1 million tonnes in the previous year. The crushing for this year has been completed.

The fall in sugar output was due to decline in cane yields in view of unseasonal rains.