Lucknow: In what can be termed as a windfall for the 40 lakh sugarcane farmers in Uttar Pradesh, the sugar millers paid R860 crore to them in a single day on Monday.

It took the beleaguered sugar industry in the state, battling the twin onslaught of paying high cane prices as well as abiding by the SC order to pay cane arrears of R951.69 crore to farmers for 2006-07 and 2007-08 seasons by April 16, three months to realise that no help was forthcoming from either the Centre or the state government to bail them out of the tight monetary situation. As a result, they were forced to pay the arrears to the farmers on the last day of the three-month time frame given by the apex court. For 2006-07, the arrears amounted to R135.85 crores, while for 2007-08, the arrears were to the tune of R815.84 crores

The sugar millers had been hoping for some kind of relief from both the state as well as the central government and had in fact written a letter to the Union finance minister and the principal secretary for sugar and cane development in the Uttar Pradesh government, asking for “granting relief by way of subsidy or an interest-free loan or some other adequate relief, to help the industry to come out of this difficult situation”.

However, when none was forthcoming till April 15, the industry was forced to dig deep into its pockets or take loans to pay the arrears within the stipulated time frame. Any delay would have meant an interest liability of 18% per day. “Out of the arrears of R135.85 crore for 2006-07, payments of around R121.78 crore have been made, while R738.11 crore payment has been made for the arrears of R815.84 crore for the 2007-08 season, all within a single working day on April 16 in order to beat the deadline. Now, R91.80 crore remain to be paid by the few defaulters remain, who are trying to pay up along with an interest of 18% every day for not abiding by the SC order,” said an official of the cane department, adding that all the big names in the sugar sector, including bajaj Hindusthan, Balrampur Chini, Triveni group, Dhampur group, Simbhaoli Sugars, Mawana group, Birla group, etc have already paid up. Among the defaulters are the Rana group, the Jaiswal group and some stand alone mills.

“The entire sugar industry in UP is going through a severe financial crises and it was the fear of interest liability of 18% that forced us to pay up hurriedly, even though we had to borrow from the market for this. Non-payment would have resulted in accumulation of higher cane price arrears, which would not have been in the interest of sugarcane growers either. It was to avoid this situation that the UP Sugar Millers Association had written to the governments to grant some relief to help the industry come out of this difficult situation. But it is unfortunate that we were left to our own resources to tide over this situation. It has been the worst blow to the industry and will definitely reflect on our future paying capacity to the farmers,” said a miller requesting anonymity.