Lucknow, November 27 Crucial talks to break logjam over cane crushing operations in Uttar Pradesh have failed, with sugar mill owners refusing to run their plants at current high sugarcane prices.
The Uttar Pradesh Government held long parleys with 99 private sugar mill owners for the second day today to resolve the deadlock that has threatened to affect sugar production in the current year, but talks failed to break the impasse, sources privy to the negotiations said.
The deadlock not just means that sugar production will be impacted severely, farmers too will not be paid for the standing cane crop.
Mills owners, who say they can’t pay more than Rs 225 per quintal to farmers as against the state advised price (SAP) of Rs 280 a quintal announced by the state government, offered the state government to run their mills.
Sources said the mills owners have informed the government they are already running huge cash losses and have to pay Rs 2,400 crore to farmers for last year.
Banks have refused to lend money for working capital needs and so they can’t afford any further losses, they claimed.
The state government, however, is not in favour of lowering the sugarcane price which are at last year's level.
Meanwhile, the Central Government is working on a financial package that includes interest-free loans to bailout the millers.
"The talks lasting for one and a half hours today with Chief Secretary Javed Usmani and private millers over these issues, besides payment of cane arrears yielded no results," a representative of a private miller said.
Though the Chief Secretary asked millers to start crushing but no solution to their problems could be worked out, he added.
Most private sugar mills have already declared shut down of operations till the government works out a proper plan to overcome their losses.
Uttar Pradesh is the second largest sugar producing state in the country. It produces about 7.5 million tonnes. Almost 80% sugarcane produced by around four million growers are consumed by private mills.
High cane prices