The Uttar Pradesh government has issued notices to the sugar mills in the state over cane arrears of around Rs 3,000 crore for the 2011-12 crushing season.
This year, the state’s sugar output had touched 6.96 million tonnes (MT) against 5.88 MT last year.
All the 123 functional mills had crushed 76.74 MT of cane with the recovery percentage standing at 9.07 per cent; lower than 9.14 per cent last year.
By way of notices recently, the sugarcane department has convened a meeting of all private sugar mill owners on June 19, wherein they would be asked to submit their payment schedule and the dates by which they propose to settle dues.
Against sugarcane payments of about Rs 13,000 crore during 2010-11 crushing season, the total dues this year have breached Rs 18,200 crore, of which arrears of Rs 3,063 crore are yet to be settled.
The state government has made a budgetary provision of Rs 400 crore for clearing the dues owed by cooperatives units.
With the Supreme Court granting the state the power to take necesaary action, in case of non-paymet of dues as scheduled, the sugar mill owners have time till July 7.
In a review meeting here yesterday, Chief Minister Akhilesh Yadav had directed officials to ensure settlement of cane arrears at the earliest and warned against any laxity.
The sugar mills claim the opening up of sugar export channel by the Centre had not benefited them much due to stagnating sugar prices in the international market. The transportation cost add to their final port price, the say. “The South based sugar mills, which are nearer to ports have benefited compared to UP mills,” an industry representative said on condition anonymity and said the mills were tying to clear their dues.
Earlier, the state mills had requested the government for facilitating soft loan to them for clearing the dues, an unlikely event in near future. The mills had also demanded the UP Power Corporation Limited (UPPCL) cleared their co-generation power dues, which could be used to pay cane farmers.
However, in the present scenario, when the power utility is hard-pressed to manage the high demand-supply gap by overdrawing from central sector and buying power from energy exchange, it is also unlikely.
Sugar is the largest organised agro-based industry in UP with an estimated 4 million farmers engaged in sugarcane farming. Other industries, namely molasses, bagasse, power (cogeneration) among others are supported by sugarcane, which accounts for an annual economy of about Rs 30,000 crore.
Official figures shows a sum of Rs 2,520 crore and Rs 543 crore as pending on private and cooperative sugar mills respectively, putting the consolidated sum at Rs 3,063 crore.
