Sugar mills across the country owed farmers as much as R5,957 crore until the end of the last marketing year for cane purchases, food minister Ram Vilas Paswan said on Thursday.

Of the total cane arrears, mills in Uttar Pradesh accounted for R3,055 crore until September 30, or 51.3%, while those in Karnataka made up for R1,802 crore and Tamil Nadu R449 crore, among others, he added.

Mills in UP, which have already threatened to suspend operations in the next sugar season starting October, have consistently maintained that the state government’s “arbitrary” fixing of cane price at elevated levels when sugar prices remain subdued is to be blamed for the arrears.

While the Centre had fixed the cane price at R210 per quintal, the state advised price of the raw material in UP was as high as R280 per quintal, although the state had initially offered an incentive worth R11 per quintal.

While the UP government has stipulated that mills make payment within 14 days of purchasing cane, the mills are yet to pay farmers even after crushing season was mostly over since May.

Paswan said five mills in UP account for a substantial chunk of the arrears. Bajaj Hindusthan led the pack with dues of R906 crore, followed by Mawana Sugars (R470 crore), Modi Sugar Mills (R367 crore), Simbhaoli Sugar Mills (R225 crore) and Shamli Sugar Mills (R57 crore).

Last month, the Allahabad High Court ruled that farmers who were yet to receive payment for cane supplies had the first right over mills’ sugar sales realisation, and not banks that had lent to the mills concerned.

It also directed district magistrates to monitor as well as “co-operate” with defaulting mills in offloading their sugar stock at the

best possible prices and that all cane arrears be cleared

by October 31.

In the last marketing year through September, the mills were granted subsidised loans worth R6,600 crore to enable them to clear cane arrears across the country, and the Centre announced in June its willingness to provide another R4,400-crore worth of cheaper loans, provided the mills gave an undertaking that they would clear all dues at the earliest. However, uncertainties have since been looming over the fate of the second tranche of loans.