UP seizes sugar mill stocks

The Mayawati government in Uttar Pradesh has taken custody of the sugar stocks of leading producers including Bajaj Hindusthan, Triveni Engineering and Industries and Balrampur Chini Mills.

"We have issued recovery certificates against 63 sugar mills that have cane arrears," said a state official.

This was the first time that this exercise is being carried out on such a scale. In the past, such action has been restricted to one or two errant mills.

District magistrates will now auction these stocks to raise money to clear their arrears. If there is a shortfall, some of the other properties could also be sold or their bank accounts attached.

Thanks to high administered price of sugarcane and low sugar prices, sugar mills in the state have run up arrears of Rs 1,122 crore on payments to farmers.

Thirteen mills that have no arrears and seven others have obtained court orders restraining the state government from doing so have been spared "" six of these belong to Bajaj Hindusthan (out of the 13 or 14 it owns). The Allahabad High Court has directed all mills to clear their arrears by October 22.

Sugar is the biggest industry in the state and directly involves about 7 million sugarcane farmers.