The state government directed private sugar mills to clear dues of cane farmers within the next 15 days.
Sugar mills, including those from co-operative sector, owe Rs 12,300 crore to cane growers for sugarcane purchased by them during the current crushing season 2017-18. UP is the country’s largest sugar and sugarcane producing state.
Principal Secretary, Sugarcane and Cane Commissioner Sanjay Bhus Reddy said in lucknow that sugar mills have been put on a 15-day notice to settle cane dues failing which stringent action would be taken against them. Ensuring timely cane payments has been one of the main pre-poll promises of the ruling BJP in the state.
The Sugarcane department issued strict instructions to 28 sugar mills, which have paid less than 50 per cent of cane dues, for speedy settlement.
The Cane Commissioner this week had summoned representatives of private sugar mills and directed them to expedite payment of arrears.
So far, UP mills have collectively paid nearly Rs 2,200 crore in the current crushing season, while about Rs 12,300 crore remained outstanding.
Bhoos Reddy also instructed mills to sell their monthly quota of sugar as allowed by the Centre so that its proceeds could be diverted to settle cane dues.
He said that a sugar mill of Birla Group in Kushinagar has made full payment to farmers, while one mill in Bahrich has cleared 97 per cent of its cane dues. Besides, 13 private mills have paid over 80 per cent of their dues.
Sugarcane arrears were considered a major factor for the shock defeat of BJP in the recent Kairana lok Sabha and Noorpur Assembly by- polls in the cane belt of western UP. Earlier, the Cane Commissioner wrote to the Centre to fix Rs 34 / kg as base price for sugar to insulate the commodity from price fluctuations that result in arrear build up. He observed that any price below Rs 34 / kg would not help in clearing arrears.
later, the Centre announced a Rs 7,000 crore package for sugar industry to ease liquidity in domestic sugar sector, while fixing minimum selling price of white (refined) sugar at Rs 29 / kg. Besides, cabinet committee on economic affairs announced the creation of buffer stock of 3 million tonne (mt). The Indian Sugar Mills Association (ISMA) also wrote to Union Food ministry over mounting cane arrears and falling prices of sugar in open market. It suggested fixing floor price region-wise, since mills produced different grades of sugar and demanded different minimum sugar prices for northern and southern-western belts.