Lucknow: The 40,000-odd sugarcane farmers in UP have much to cheer this season as they have already received R694 crore more than what they got as cane payments in the entire season last year. And with R4,262 crore still due this year — which the sugar industry has to necessarily pay by July 7 as per an SC directive — their incomes have seen a jump of almost R5,000 crore, apart from R1,000 crore in arrears for 2006-08.

This season, the farmers have already earned R13,717 crore as cane price against R13,023 crore they earned in the entire season last year. The main reason behind the enhanced earnings is the fact that the previous Mayawati government had fixed a relatively higher state advised price (SAP) for cane, which the industry had termed ‘exorbitant' ‘and contested in the courts of law.

The farmers have also received arrears amounting to almost R1,000 crore from the 2006-08 seasons in a single day, thanks to the SC order directing the mills to do so by April 16.

According to sources in the sugar sector, Uttar Pradesh, which is the largest sugarcane producer and the second largest sugar producing state in the country, is likely to close this year with the total sugar production of 69.50 lakh tonne after crushing approximately 767 lakh tonne of cane, which is 18% higher than last year.

Talking to FE, an official of the sugarcane department said that of the total 124 sugar mills in the state, both private as well as those of the UP sugar cooperative federation, 119 have already closed for the season and five are running on the leftover cane that they have purchased already.

“The remaining five factories are also expected to close by the end of the month,” he said, adding that till April 25, the sugar mills had crushed 766.33 lakh tonne of sugarcane and produced 69.48 lakh tonne of sugar, for which the farmers have been paid R13,717 crore, while R4,262 crore is still due to them.

However, the industry is not amused. The mill owners feel that the entire burden of the farmers’ prosperity has been thrust on the industry’s shoulders. “The industry is in dire straits. Due to the huge difference between the cost of production of sugar and sales realisation, the industry is making a loss of almost R300 per quintal on every quintal of sugar produced, as a result of which arrears have started showing up in the current season too. The losses to the sugar industry in the current year are estimated at around R3,000 crore. We have asked for some kind of relief by way of subsidy or interest-free loan from both the Centre and the state government, to help us come out of this difficult situation,” said a miller on request of anonymity.

“While the cost of sugar production stands at R3,100/quintal, it is being sold at R2,800/quintal, which, in the long run, is suicidal for the industry. It is the responsibility of the state government to ensure that the sugar industry, which is the backbone of the state’s economy, stays viable,” said a spokesperson of the UP Sugar Millers Association.