Sugarcane farmers' body seeks revocation of recovery proceedings

Rashtriya Kisan Mazdoor Sangathan (RKMS) today sought revocation of recovery certificate (RCs) issued against Uttar Pradesh sugarcane farmers, who had defaulted on repayment of agricultural loans.

In a letter to Chief Minister Akhilesh Yadav, Sangathan convenor V M Singh said the farmers were unable to repay loans, since cane arrears worth over Rs 8,500 crore were still pending with private sugar mills in the state despite the Allahabad High Court directives.

He maintained that the HC in an earlier observation had directed the state against recovery of outstanding agricultural loan from cane-growers till they had been paid the cane price.

Singh lamented that in spite of this injunction, the state officials had issued RCs against the cane-growers.

"Although, the RCs against farmers have been put on hold, they would still be subjected to 10% administrative/recovery charges, which are added to the outstanding loan amount. The solution is to withdraw these RCs to provide relief to harried farmers," Singh told Business Standard.

Hearing the petition filed by RKMS on May 30, the HC had rapped the state government for failing to settle cane arrears.

So far, the government had filed over 30 First Information Reports (FIR) and issued over dozen RCs against defaulting mills. RC gives the power to the district administration to seize assets for recovering the underlying amount.

The bench had directed the government for settlement of arrears and submission of an affidavit by UP cane commissioner in July to this effect.

Meanwhile, Singh alleged mere issuance of RCs against mills would not serve any purpose and further proceedings should be initiated against mill owners/management to recover arrears.

Last year, the UP government had retained sugar advised price (SAP) of cane at Rs 280/quintal. The mills were allowed to pay Rs 260/quintal upfront and the remaining Rs 20/quintal later.

During 2013-14 crushing season, UP sugar output has dropped by 13% to about 6.42 million tonnes (MT). During 2011-12 and 2012-13, UP sugar production had stood at 6.97 MT and 7.40 MT respectively.