Ahead of elections in Karnataka, the Union Government on Wednesday decided to directly pay sugarcane farmers about Rs 1,540 crore to clear less than a tenth of the outstanding that sugar mills owe to them. Sugarcane farmers, who have not been paid full amount by sugar mills, will get Rs 5.5 per quintal (of cane crushed) directly in their bank accounts from the central Government that is keen to prevent an agrarian crisis developing in sugar producing states like Uttar Pradesh, Maharashtra and Karnataka. The move would provide much-needed relief to mills that are facing a loss of Rs 8-9 per kg in sugar sales because of record production, resulting in a huge cane arrear of about Rs 20,000 crore and out of that over Rs 8,000 crore pertains to UP and about Rs 3,000 crore each to Maharashtra and Karnataka.