UP to press private sugar mills to pay farmers as arrears top Rs 10,000 cr

With Uttar Pradesh sugarcane arrears standing firm at about Rs 10,000 crore in the ongoing crushing season, the Yogi Adityanath government is likely to pressurise private sector mills to clear their respective outstanding.

Against a total of about Rs 32,000 crore payables by both government and private sectors mills in UP, the millers have so far paid a little more than Rs 21,000 crore, pegging the net payments ratio at roughly 65 per cent, even as the crushing season is nearing closure.

During the recently concluded 2019 Lok Sabha polls in UP, cane arrears were high on opposition parties' priority list as they sought to paint the ruling Bharatiya Janata Party (BJP) government as anti-farmer. Interestingly, ensuring prompt cane payments was one of the foremost pre-poll promises of the BJP in the run-up to the 2017 UP polls. However, the two-year-old BJP government has not been able to ensure prompt payment of cane prices.

Last evening, the chief minister was to hold a review meeting over sugarcane payments status. However, the meeting was postponed at the last moment and is now likely to be held within a few of days. Since, the polls are now over, Adityanath is back to his normal routine and is taking stock of pending work.

Meanwhile, UP sugarcane commissioner Sanjay Bhoosreddy told Business Standard that nearly Rs 1,500 crore was likely to be directly transferred to the bank accounts of cane farmers under the central government’s export assistance to sugar mills, buffer stock etc, which would ease the arrears situation to that extent in one go.

“The current season’s payments ratio of 66 per cent is the highest in the past several years. We are already strictly following up with the private mills to settle their arrears at the earliest,” he said.

Last year, the Adityanath government had even floated a soft loan scheme for the beleaguered private millers. It was aimed at mills whose payments ratio stood at more than 30 per cent during 2017-18 season. Later, the eligible units were sanctioned soft loans worth a little over Rs 2,900 crore.

In the ongoing 2018-19 crushing cycle, total 119 sugar mills, including 94 private, 24 cooperative and a UP State Sugar Corporation unit, had participated in crushing operations, while majority of mills have now concluded their season.

Last year, UP mills had collectively produced over 12 million tonnes (MT) of sugar, while total payables to farmers stood to the tune of Rs 35,400 crore. This year, the sugar output is likely to be a little less than last year, while total payables are also expected to be below Rs 35,000 crore.

“This year, the sugar recovery ratio is higher, as such the quantity of cane crushed would also be lower compared to last year,” Bhoosreddy informed.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel