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Uttar Pradesh to ensure sugar arrears payment before October 20

Around Rs 44 billion will be given as soft loans to sugar mills which will also be used for payment of sugarcane arrears

Uttar Pradesh to ensure sugar arrears payment before October 20

Uttar Pradesh will ensure that the entire sugarcane arrears of little less than Rs 100 billion, accruing to the state’s farmers from 2017-18, would be paid before October 20. 

This comes on the back of a recent announcement of a package by the state government, sugarcane minister Suresh Rana said.

“The state government has announced a package of Rs 55.35 billion for sugarcane farmers of which around Rs 10 billion will be paid through cooperative societies, Rs 250 million through the state sugar corporation and around Rs 5 billion directly to farmers associated with private sugar mills at the rate of Rs 4.50 a quintal,” Rana told Business Standard.

He said around Rs 44 billion will be given as soft loans to sugar mills which will also be used for payment of sugarcane arrears.

“In the next 15 days, the state cabinet will work out the modalities of the soft loans and conditions under which it can be applied,” Rana said

However, critics have questioned the state’s sugar package on the grounds that it is much less than what is required for wiping off the arrears.

“Most sugar mills have already taken loans against their assests. Therefore, it remains to be seen how many of them can avail the soft-loan facility being offered by the state government. Moreover, the amount allocated for cooperatives and state corporation is lower than their actual debt,” Sudhir Panwar, former member of UP Planning Commission, said.


On some sugar mills declining to participate in meetings called to determine the cane reservation area, Rana said all of them will take part and the state government has fixed a nodal official for each mill.

Meanwhile, in a related development, the state government has decided to invest Rs 1.56 billion to revive six distilleries for producing ethanol and organic fertiliser.

These distilleries owned by the UP Co-operative Sugar Mills Federation had been temporarily shut following the Central Pollution Control Board (CPCB) order over non-compliance of environmental norms.

Uttar Pradesh to ensure sugar arrears payment before October 20
However, UP Chief Minister Yogi Adityanath had directed the state sugarcane department to take steps to revive these units. The government will infuse Rs 1.56 billion for setting up of zero-liquid discharge bio-compost plants in these six distilleries for producing ethanol and organic manure without harming the environment.

The manure would be supplied to farmers, who would also check the consumption of chemical fertilisers in the vicinity.

According to sources, Adityanath would soon lay the foundation of the projects located in Saharanpur, Bulandshahar, Mau, Pilibhit, Farrukhabad and Bahraich districts.

The units are likely to be completed before start of the coming crushing season in October-November 2018.

While there are 24 functional cooperative sugar mills in UP, there were only seven distilleries integrated with these plants. Of this, six were closed down after the CPCB order.

The six distilleries are projected to process 0.28 million tonnes (MT) of molasses (a sugar byproduct) annually to produce ethanol and organic manure, helping the federation earn almost Rs 3 billion in revenues.

Currently, the private sector dominates the UP sugar market with 94 the total 119 units in the state.