UP govt sop to pvt sugar mills inadequate: UPSMA

Private sugar mills in Uttar Pradesh today said a rebate of Rs 6 per quintal offered by the state government is "inadequate" and the condition imposed to avail this assistance is "unreasonable".
Last week, the UP government had announced a concession of Rs 6 per quintal to those private mills which clear dues by the end of this month. It was over and above Rs 11 per quintal offered in December last year.
Incentives were promised at the beginning of the current crushing season as mills were not ready to start operations due to high cane price of Rs 280 a quintal fixed by the state.

"The state government announced only Rs 6 per quintal assistance, instead of Rs 9 promised. There has been no consultation in this regard with the industry representatives. Otherwise, errors in calculations would have been avoided," UP Sugar Mills Association (UPSMA) said in a statement.
The condition that mills have to clear dues by September 30 for availing the rebate, is "unreasonable and unachievable" because the deficit is so large that even Rs 9 per quintal assistance would not be enough to clear all arrears, it said.
"Therefore, with a lot of anguish and disappointment, the UPSMA on behalf of private mills in the State, submits once again to the state government that the mills of UP do not have the ability to meet the conditions imposed," it said.

The industry would like the state government to give the assistance directly to the sugarcane farmer, it added.

Stating that there is disparity in giving assistance to cooperative and private sugar mills, UPSMA said that there are serious flaws in calculating losses of private mills.
"...If the cooperative mills have supposedly lost Rs 69 per quintal of cane, how can the losses of private mills be assumed to be just Rs 17 per quintal only. Do they not pay same cane price and sell sugar and other by-products in the same market? Therefore, there is something seriously wrong in the calculations," it said.

The state government has already given a financial assistance of Rs 400 crore to 23 cooperative mills and has promised additional help of Rs 200 crore, it said.
Taking into account the rebate of Rs 11 per quintal given earlier, "cooperative mills will get a total financial assistance of Rs 98 per quintal, whereas private mills are being offered help of just Rs 17 per quintal. Is this justified?", the industry body asked.
Private mills are "aggrieved at this unfair and unjustified treatment," it said.
Despite these incentives, mills owe Rs 5,099 crore to farmers during the 2013-14 season in Uttar Pradesh, the country's second biggest sugar producer.

UP has 119 sugar mills of which 96 are in the private sector. Over 40 lakh farmers are directly engaged in sugarcane cultivation.