UP sugar industry wants Rs 2,000-cr aid

Close on the heels of Uttar Pradesh Chief Minister Mayawati seeking a special package of Rs 80,000 crore from Prime Minister Manmohan Singh, the state government has sought another relief package of Rs 2,000 crore from the Centre for the sugar industry.

The state government has sought the special assistance from the sugar development fund under the Union agriculture ministry.

Private sugar mills' representatives in a recent meeting with the sugar industry minister Naseemuddin Siddiqui, as a bailout package, had sought one-time loan of Rs 2,000 crore from the sugar development fund. The proceeds from the package are proposed to be disbursed as loan for five years to the private mills for setting up an ethanol plant.

The private sector has also urged the state government that blending of 10 per cent ethanol with petrol be made mandatory and that UP should take up this matter with the Centre for an early settlement.

The sugar industry has also sought export subsidy from the state government.

The state government had recently called a meeting of the representatives of all sugar mills including private, public and co-operative sectors to review the cane arrears so far cleared by the sugar mills. The UP government has issued a stern warning to the private sugar industry to clear the arrears by August 31.

As the government is mounting pressure on the private mills to clear the arrears by August 31 next, the industry representatives pointed that there was a glut of sugar in UP due to a record production of over 850,00,00 million tonne in 2006-07. The situation has been further aggravated by the slump in prices and crash in price in the international market.

The government is concerned over the possible political fallout of the issue as the opposition parties may exploit the issue and situation may take an ugly turn if the farmers resort to agitation for the payment of their dues.

This issue dominated the proceedings of the Assembly during the recently concluded budget session as the opposition accused the government of being soft on the private sugar industry. The opposition said the private sugar mills were not paying the dues of farmers while on the other hand farmers were being targeted by the banks and power utilities for recovery of dues.

According to the cane department, 83 private sugar mills, 28 co-operative sugar mills and 22 public sector units together purchased sugarcane worth Rs 11,010.33 crore. Of this the industry has paid Rs 8,675 crore to the farmers while Rs 2,335 crore or 22 per cent is still to be cleared.

The private sugar mills with Rs 1,737 crore tops the list of arrears while the public sector mills have paid Rs 379 crore against the purchase of Rs 612 crore and co-operative mills owe Rs 363 crore against the purchase of sugarcane worth Rs 1,305 crore.

Among the top defaulters in private sector are Bajaj group with Rs 413 crore as arrears followed by Balrampur group with Rs 182 crore, Uttam group with Rs 174 crore, Modi group with Rs 118 crore, Rana with Rs 18 crore and Jawahar Jaisawal group (JHV) with Rs 54 crore.