The Centre has requested the Uttar Pradesh government to take over one sugar mill, setting an example for all defaulting sugar factories in the state, which have not yet paid dues to cane farmers.

The minister of state for agriculture, Sanjeev Balyan, has written to the UP chief minister Akhilesh Yadav seeking strict action, including jail for defaulting sugar mill owners.

“The state must take over at least one mill to set things right,” he said. He also offered the Centre’s help if such an action is contemplated. The total cane arrears in Uttar Pradesh are estimated at about Rs 2,100 crore. Of this, four sugar companies between them have owed dues worth Rs 1,800 crore.

Cane arrears is a big issue in UP. Four mills, Mawana, Modi, Simbhaoli and Rana Sugars, owe Rs 1,800 crore dues to cane farmers.

Balyan said the defaulting mill owners should be arrested. The state government is not taking stringent action against defaulting mills despite a law in place, he said, adding, “If the government arrests one mill owner, the rest will start making payment to farmers.”

According to rules, the mill has to pay farmers all dues within 14 days of purchasing the cane. Failing to do so would entail imposition of a simple interest to be paid to farmers.

Sugar rates are now at favourable levels for mills and they should have made payments promptly. Companies like Bajaj Hindustan, which has 13-14 mills in the state, has paid only half of its dues, he said.

Balyan, who is the BJP MP from Muzaffarnagar, said that the state government has not taken any action despite his writing several letters to the chief minister.

The four defaulting mills have not received working capital from banks and bank on sugar sales to make the payment to farmers. Sugar production in Uttar Pradesh, India’s second largest state after Maharashtra, is estimated to decline to 6.8 million tonnes in 2015-16 season (October-September) from 7.1 million tonnes in the previous year.

The fall in sugar output has been attributed to drought.