UP sugarcane arrears at Rs 3,500 cr, 90% owed by private mills

CM Yogi Adityanath had warned private millers of strict action for failing to settle arrears in full

Uttar Pradesh sugar mills owe farmers more than Rs 3,500 crore in arrears for the current crushing season, which has almost rounded off.
 
About 90 per cent of these arrears, or about Rs 3,200 crore, are owed by the state's private sugar mills, which number 91 of the total 116 functional units in the state.
 
Against total sugarcane payables of Rs 25,381 crore for 2016-17 season, the mills have paid farmers nearly Rs 21,670 crore, thus leaving the remaining amount of about Rs 3,500 still to be settled, according to the latest available data.
 
Soon after taking oath of office on March 19, chief minister Yogi Adityanath during a review meeting here on March 23 had asked the private millers to settle their arrears in full and warned of strict action against defaulters. On that day, the cane arrears stood at Rs 4,160 crore. Full settlement of cane arrears was one of the most prominent pre-poll promises of the Bharatiya Janata Party (BJP) in run up to the 2017 poll.
 
On April 20, a delegation of UP Sugar Mills Association (UPSMA) comprising sugar mills owners and industry officials had also called upon Yogi and submitted a memorandum, demanding a viable cane pricing and revenue sharing formula to insulate sugar sector from pricing and cyclical fluctuations.
 

Crushing season	Operating mills	Output (mn tonnes)	Value bought by mills (Rs cr)	State cane price #
2011-12	122	7.00	18,200	240
2012-13	121	7.40	22,463	280
2013-14	119	6.47	19,387	280
2014-15	118	7.10	20,641	280
2015-16	117	6.85	18,000	280
*2016-17	116	8.75	25,381	305
# Common variety, price in rupees/quintal * Crushing season underway, but at fag end; Compiled by Virendra Singh Rawat

The industry had also reiterated its long pending demand of de-reservation of molasses, a by-product, produced by mills, so that it stokes their profitability and help them settle arrears faster.
 
Meanwhile, UP sugar production has clocked its highest ever output at 8.75 million tonnes (MT) compared to 6.21 MT last year, thus clocking 40 per cent higher output. The previous highest sugar output in the state had stood at 8.50 MT in 2006-07 season.
 
Last year, the total payables to UP cane farmers had stood at about Rs 18,000 crore, which have increased to over Rs 25,000 crore, a jump of nearly 40 percent, although the cane price was also higher this season. The state cane price effective for the current season was earlier hiked by Rs 25 from Rs 280/quintal to Rs 305/quintal for normal variety. The previous cane price hike in UP was announced in 2012-13 from Rs 240 per quintal to Rs 280 per quintal.
 
Of the 116 state mills, 114 units have concluded their operations and shut for the season. Now, only two mills, one each from the private and cooperative sectors, are functional, which are likely to close down in the next couple of days.