Amid continuing crisis in the UP sugar industry, the Centre on Thursday said it is working on a financial package for the cash-starved mills and asked states to implement the Rangarajan panel’s recommendation of linking cane rates with sugar prices.

The Centre in May partially decontrolled the R80,000-crore sugar sector by giving freedom to mills to sell sugar and removing obligations to supply subsidised sugar to ration shops.

“We have done our bit. There is no levy. There is no release mechanism. Out of the eight recommendations made by the Rangarajan committee, the remaining are with the state governments, like sharing of profits and others,” food minister KV Thomas said.

The panel had suggested linking of cane rates to sugar prices which state governments are yet to implement.

“We have written to the state governments to implement the Rangarajan Committee recommendations in letter and spirit. There should be sharing of profits,” he said, adding that the Centre is now left with no powers.

Sugar companies in Uttar Pradesh, the country’s second largest producer, have decided not to run their factories as cane prices fixed by the state are not viable.

UP millers have said they cannot pay more than R225 per quintal to sugarcane farmers against the state advised price (SAP) of R280 a quintal announced by the UP government on Wednesday.

“There should be some assistance in the form of financial aid which we are working on,” Thomas said, when asked about the demand to bail out mills.