Sugar millers in Uttar Pradesh are feeling the pressure with cane dues inching upwards to Rs 6,500 crore already. Industry watchers see it rising to around Rs 10,000 crore by season end, thus forcing the topic of introducing revenue sharing formula back on the negotiating table.

According to industry insiders, the downward spiral of sugar prices, coupled with a bumper sugar production year, distressed molasses lifting, a better yield and recovery and cogeneration dues piling up, the millers are in trouble. And since UP is a land-locked state, it’s unable to reap the benefits of exporting sugar.

“What is being seen by the layman as a ‘good crop year’ is actually a bane for us. With so much adversity in play, it’s a difficult preposition to run the industry. And hence, it brings us back to the core issue of rationalision of cane pricing, as is already been done in Maharashtra and Karnataka. And now Tamil Nadu has become the first state to move away from SAP and adopted the revenue sharing formula and has made adequate provision in their current budget,” said an industrialist, requesting anonymity.

Another miller said it’s now a question of survival for a large number of sugar companies in the state, and said the government should treat it as an SOS call to save the largest industry in the state, which not only supports around 5 crore farmers and their families but also contributes over `20,000 crore of taxes and duties to the state exchequer directly and indirectly.

“There is an urgent need for UP to adopt the revenue sharing formula from this year itself, especially so because if the industry is unable to pay cane arrears on time, lakhs of farmers would be adversely affected,” he said, adding that since the welfare of the farmers is on top of the agenda of both the central and the state governments, this one positive step in the right direction will not only help farmers but also permanently address the issue of cane price arrears.