A day after Prime Minister Narendra Modi at a rally in Saharanpur talked about a “relief package” of Rs. 6,000 crore to the sugarcane industry, farmers were unhappy and confused about his ‘rhetoric’ on the issue as the money has not reached them yet.

The Centre sanctioned a ‘soft loan’ of Rs. 6,000 crore to the sugarcane industry to enable it to pay arrears to farmers. Uttar Pradesh’s share comes to about Rs. 1,200 crore out of which the private sugar mill owners will get no more than Rs. 850 crore from respective banks.

Sugarcane co-operatives are expected to get Rs. 150 crore.

The industry has been facing several challenges as sugar price is continuously falling while the input cost is going up every year because of which the mill owners have been unable to pay the rates of sugarcane. The mill owners owe about Rs. 5,200 crore to the farmers for the sugarcane they bought from them last year.

People in the sugarcane industry said that the money was “not the kind of soft loan as it is being projected to be.”

The repayment of this loan along with the interest has to be done in the next five years. “The Centre’s contribution is that it will pay the interest of the first year but that also till 10 per cent. If the bank charges more than 10 per cent interest then that will have to be borne by the mills themselves,” said a prominent stakeholder in the industry.

A senior official of the State sugar mills association told The Hindu that the loan was “another liability for us but we do not have any other option.”

She was of the view that the loan won’t do any good given that the total sugarcane arrear which the mill owners owe to the farmers is about Rs. 5,200 crore.

According to sources in the sugar mills association, the mills are yet to get the loan. Some of them have applied for the loan and their applications are being processed.