Uttar Pradesh Sugar Mills Association (UPSMA) feared that any hike in State Advisory Price (SAP) of sugarcane by the Government would not just adversely affect the farmers but will also hit the mill owners who were forced to shut their own units than suffering huge losses.
''There is no other option rather than to close down our units if the government continue to hike the SAP as Rs 280 per quintal SAP of last year was forcing us a loss of Rs 4 per on production of one kg sugar,'' claimed Indian Sugar Mills Assocation DG Avinash Verma and UPSMA president C B Padaudia in a joint press conference here.''Private sugar mills are bleeding and on the ventilator in the ICU and any act by the state government will make the sector totally dead affecting the cane farmers the most,'' they claimed. ''If sugar mills shuts down their units, the cane growers in the area will be left out with nothing and the entire responsibility will be of the state government,'' they claimed.
The Association maintained that cane growers were getting the highest return in the state in comparison to wheat or paddy cultivation. While the wheat and paddy farmers were getting just Rs 45,000 a hectare, the cane farmers are receiving Rs 75,000 a hectare. Demanding a subsidy of Rs 40 a quintal directly to the farmers, Verma said talks with the senior state officials have yielded no results even after they admitted that the industry was in severe financial crisis.
Already eight sugar mills in the state closed down during the past two years due to financial crisis and if the state government overlooks the issue, others may follow soon.
UPSMA also released a report by an international survey company, CRISIl, which has given a very gloomy picture of the sugar industry in UP. Private sugar mills are yet to pay around Rs 2,400 crore dues of the cane farmers in the state and have claimed that hike in the SAP any more will be disastrous for the industry. Making a five-point demand to save the UP sugar industry from dying a slow death and leaving the cane farmers distressed and helpless, UPSMA said the state government should immediately adopt the Rangarajan Committee's recommendation on determining the cane price at 70 per cent of revenue realised from sugar and first stage by-product or 75 per cent of sugar price realisation, and the two-stage payment of cane price to the farmers.
The Association has appealed to the UP government to give subsidy to the mills to clear the cane price arrears of 2012-13 which is still around Rs 2400 crore and the government should announce a cash subsidy for 2012-13 sugar season of around Rs 40 to Rs 50 a quintal of cane, payable directly to the farmers.
It has also demanded increase in the transport rebate for the cane transported by sugar mills from purchase centre to mill gate, to actual or 100 per cent of cost as estimated by the state government. They also asked for increase in the difference between the price of rejected varieties and normal varieties to at least Rs 25 a quintal, and permit mills not to buy varieties from 2014-15. CRISIl in its report said in UP, 124 private sugar mills are spending Rs 31.7 for purchase of canes to produce one kilogram of sugar while the total cost of one kilogram by a mill comes to Rs 35.