Private sugarcane mills in UP unwilling to start crushing

The Uttar Pradesh government and the private sugar industry are on a collision course over the price of sugarcane and the commencement of cane crushing for the current season 2007-08.

Private sugar mill operators have said they were even ready to go to jail but would not pay the state advised price (SAP) of Rs 125 to Rs 130 per quintal for sugarcane. The SAP is far higher than the statutory minimum price (SMP) announced by the Centre.

The private sugar mills maintain that crushing would result in cash loss and it would be unwise to operate sugar mills at current SAP, which will only feed more sugar in the market facing glut.

A senior official of the sugarcane department said here that as contingency plan many private mills in western UP have nominated "occupier" of the mill who will go to jail in case the government decides to crack down.

The official said the mill-owners had decided to give Rs 1 lakh as compensation and also provide legal aid for obtaining bail, if the occupier was jailed.

Even the threat of tough penal actions, like arrest and jail, by the sugarcane development minister, Naseemuddin Siddiqui, seems to has not deterred private mills.

The minister, on November 5, had announced in the Assembly that there was no uncertainty over the commencement of crushing by the mills and 141 mills would start crushing in November. Tabling the crushing schedule of 141 mills in the assembly, the minister had announced that any private mill failing to honour the schedule would be penalised and the management would be sent to jail.

The district administration in western UP had gone to the extent of keeping the top managers of private mills as hostage until they give a written undertaking for starting the crushing operation. The managers were released only after they submitted a written undertaking to start the crushing operation of their respective mills in November.

Barring one private mill in west UP, be it the private, public or the cooperative sector, not a single sugar mill has started crushing this year.

Resentment among the farmers, particularly in Western UP, is growing as they were forced to sell sugarcane to gur and khandsari units at Rs 55-Rs 60 per quintal, which is less then half of the SAP announced by the state government.

An official of the Cane commissioner's office here said the government was keeping a close watch on the situation. He admitted that that farmers may resort to agitation if the sugar mills fail to honour the crushing schedule.