UP sugar mills threaten to suspend crushing ops in 2014-15

With the UP government initiating action against cane payment defaulters, cash-starved private sugar mills in the state today threatened to shut operations in the 2014-15 season unless cane prices are rationalised.
"A decision in this regard has been taken as the state government has not fulfilled the financial commitment given at the start of the crushing season in October 2013 and not adopted a rationalised cane price policy," UP Sugar Mills Association Chairman C B Patodia told reporters.
"Instead, recovery certificates, FIRs and arrests alongwith coercive steps are being adopted by the state."
In the absence of any clarity from the UP government on adoption of a rationalised cane price formula for the 2014-15 season (October-September), Patodia said that sugar mills are not in a position to commence crushing operations.

A 'notice of suspension of cane crushing operations' was served to the state government on August 4. Individual mills would also be submitting their notices to state government hereafter, he added.
Due to high cane price set by the UP government and liquidity problems, mills have not been able make payment to farmers in time and arrears have mounted to Rs 7,000 crore.

UPSMA represents 96 private sugar mills in the state. Mills are facing financial losses as they are selling sugar lower than cost of the production in the wake of higher domestic production.
The Uttar Pradesh government has issued notices to 52 sugar mills for not making payments to cane farmers and also lodged 60 FIRs against 43 sugar mills this year, according to the latest information placed before Parliament.

As per industry estimates, UP millers produce around 30 per cent of the country's sugar at about 70 lakh tonnes. The sugar industry size is around Rs 30,000 crore and farmers earn around Rs 20,000 crore from this sector.