Despite the high-decibel politicking over sugarcane dues in poll-bound Uttar Pradesh – the country’s largest sugarcane producing state – sugar season 2016-17 has been rather sweet for the approximately 4 million cane farmers in the state. High cane availability, good yields, higher recovery and robust sugar prices have successfully wiped off the losses that had been plaguing the industry for the last many years. In fact, five top sugar companies of the country – having as many as 25 sugar mills in the state – have paid cane dues much in advance of their 14-day deadline. While Balrampur Sugars, which has 10 sugar mills, has paid R97.62 crore in advance, DSCL has paid R44.54 crore for its four sugar mills.
Dhampur Sugar, too, has paid R20.88 crore as advance cane price for its five sugar mills. Similarly, Dalmia and Dwarikesh Sugar have paid R14.84 crore and R12.24 crore, respectively, for their three sugar factories each. An official of the UP sugar and cane development said 16 sugar mills have bought sugarcane worth R16,103.41 crore since the beginning of the season, out of which they have already cleared payments of R12,411.66 crore. “As per data collated till February 27, cane dues now stand at R3,691.75 crore, which amounts to almost 77% payment. And what is interesting is that many millers have paid well in advance of the 14-day deadline, within which it is mandatory to clear farmers’ dues,” he said.
However, bucking this positive trend, there are a handful of some who, despite a good season, are not making timely payment of cane dues. “The payment this year has been outstanding except a handful of millers who have not been paying consistently, pulling the entire industry’s average down,” said the official, adding that out of the remaining R3691.75 crore, the private sector dues run up to R3419.43 crores. “Interestingly, even among the private millers, three groups are acting spoilsport and have made abysmal payments,” he said.
According to the data, out of the R3,419.43 crore owed by the private sector, Bajaj Sugar itself owes R2,001.55 crore for its 15 sugar mills, followed by Simbhaoli Sugars, which owes R374.56 crore for its three mills and Modi Sugar, which owes R305.23 crore for its two mills. “While the Modi group has paid only 1.11% of its entire cane arrears, the Simbhaoli group has paid 21.73% and Bajaj has paid only 29.47% of its dues. This, however, at a time when sugar prices are extremely robust and there is no reason to pile up arrears,” the official said.
However, a Bajaj Hindusthan Sugar spokesperson said since the company was not only the biggest sugar miller in UP but also in India and South East Asia, it was natural that its cane dues would be significant. “There is nothing unusual about it. In fact, the sugar business is good, the dues will also be higher since higher quantity will be purchased and higher cane dues will remain outstanding,” he said.
The Bajaj group underwent a huge capacity addition during 2003-06, in which it expanded from two sugar mills to 14 at present. This resulted in piling up of high debts, which the company is still servicing.
For Simbhaoli Sugars, too, outstanding debts have been the main reason for non-payment of dues. “We are in the midst of debt restructuring and hopefully by March we will be able to complete it. Once that is done, we will be able to expedite our cane payments and would be in line with the industry by the end of the season. We are also in the process of hiving off our stake in the Kandla refinery, with which we plan to clear the dues and bridge the gap,” a spokesperson said.
The Modi group is also fighting off old losses. “We are clearing off last season’s dues with this year’s sugar sales. Our basic problem is that we are not getting any credit from banks. We are in talks with the food ministry and trying to get some funding from the Cane Development Fund. Once that is done, we will be able to pay off the cane dues to our farmers,” said a company spokesperson. A miller, on condition of anonymity, said by not paying cane dues these defaulting millers are cheating farmers. “Had there been a genuine reason for not paying, like it was for the last few years when the industry was going through a rough phase, this kind of behaviour would have been understandable. But when the going is good, nobody should tolerate this kind of behaviour from them.
These groups have a legacy of bad payments. And in this scenario, why is cane given to them in the first place?” he questioned, adding that the government, as the conscience keeper of the farmers’ well-being, should have floated the option on auctioning the cane to those who are good paymasters rather than invariably giving cane to defaulters year after year. “A basic discipline has to be maintained and I believe it is the government of the day which has to be questioned as to why cane is allotted to such erring groups in the first place,” he stated.