Private sugar mills in Uttar Pradesh, which owe over Rs. 5,000 crore to cane farmers, on Monday said the State Government’s offer of an additional rebate of Rs. 6/quintal to enable them to clear arrears was ‘inadequate’.
In a statement on Monday, the millers said earlier they were given a relief of Rs. 11/quintal, taking the total subsidy to Rs. 17, which was not enough, given the poor revenue realisation due to depressed sugar prices and lack of a rational cane pricing policy in the State.
Differential treatment
Private millers said they had been given ‘short shift’ in comparison to sugar cooperatives, which had been given assistance at the rate of Rs. 69/quintal. A Rs. 400-crore provision had been made for cooperative mills earlier this year with an additional assistance of Rs. 200 crore being promised recently, they added.
“The question to be answered is if the cooperative mills have supposedly lost Rs. 69/quintal of cane, how can the losses of private mills be assumed to be just Rs. 17,” the UP Sugar Mills Association (UPSMA) said in a statement.
It questioned the rationale behind providing 23 cooperative mills procuring 695 lakh quintals of cane with help worth Rs. 600 crore, while aiding 95 private mills purchasing 6,271 lakh quintals with Rs. 375 crore.
“Considering the concessions of Rs. 11/quintal of cane earlier, the cooperative mills will get a total financial assistance of Rs. 98/quintal,” the statement added.
Cane price in UP are the highest in the country at Rs. 280/quintal, much higher than Central Government set ‘fair and remunerative price’ (FRP) — the minimum price that can be paid to cane farmers — of Rs. 220. The State’s private millers maintain that they would not be able to pay the dues at the prevailing rates and have threatened to stop crushing operations for the season that begins on October 1.
“UP sugar mills have been making huge financial losses for many years. This announcement of Rs. 6 of cane is grossly inadequate and doesn’t address the problems of the mills,” said a senior UP sugar industry official.
UP, the second largest cane producer in the country after Maharashtra, is home to 119 sugar mills, of which 96 are in the private sector, with over 40 lakh farmers directly engaged in cane cultivation.