Lucknow, 27 June: The Uttar Pradesh government will formulate a new policy for setting up sugar mills and cogeneration plants.

The proposed policy would be aimed at boosting sugar production and energy generation in the state and increasing farmers’ income.

Chief Minister Akhilesh Yadav has directed officials for preparing the new policy, while meeting a farmers’ delegation over issues facing the sugar sector.

“The government is looking at the issue of sugar sector in a holistic manner, since sugarcane can be used to produce ethanol, power and other byproducts as well, apart from just sugar,” a senior government official told on condition of anonymity.

He said the formulation of such a policy had been in consideration and the government felt more sugar mills could be set up in the state in the interests of all stakeholders.

Meanwhile, Yadav has directed for setting up of cogeneration units at cooperative mills in Lakhimpur, Bijnore and Baghpat districts and ethanol units at cooperative mills in Bahraich, Bulandshahr and Saharanpur districts.

He also ordered for early settlement of farmers’ dues on sugar mills pertaining to the 2011-12 crushing season, which is over Rs 3,000 crore with around Rs 2,500 crore on private mills alone.

The cooperative mils have the balance arrears and the government had already made budgetary provision of Rs 400 crore for clearing these dues.

Yadav underlined that compliance with the Supreme Court directive over farmer’s dues should be ensured.

The government has also decided to sent a delegation of 25 progressive sugarcane farmers to Australia, Fiji and Mauritius for research and learning modern farming techniques.

This year, UP’s sugar output have touched 6.96 million tonnes (MT) against 5.88 MT last year. All 123 functional mills had crushed 76.74 MT of cane with recovery percentage standing at 9.07 per cent; lower than 9.14 per cent last year