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The Uttar Pradesh (UP) government on Thursday tried to break the logjam facing its sugar industry by issuing an ultimatum to millers that they resume operations and reiterating its offer of abolishing the entry and purchase taxes. The move, however, cut no ice with the millers, who stuck to their demand that the state-advised price for sugarcane be lowered.
The state has fixed new deadlines — of December 4 and 7 for the western and eastern part of the state, respectively — for sugar millers to start operations. UP Principal Secretary (sugar industry & cane development) Rahul Bhatnagar, addressing the media in Lucknow, said action would be taken against the mills that failed to comply with the fresh directives.
In Delhi, Food Minister K V Thomas, who met Prime Minister Manmohan Singh, Finance Minister P Chidambaram and Prime Minister’s Economic Advisory Council Chairman C Rangarajan, assured the Centre would do everything possible, including freeing interest rates on loans, to help millers. Prime Minister Manmohan Singh has already set up an informal group under Agriculture Minister Sharad Pawar to work out a package, expected to be announced in a few days.
In Maharashtra, the country’s largest sugar producer, agitation by sugarcane growers’ organisations for a higher cane price turned violent on Thursday, with activists targeting state-operated buses. In Karnataka, on the other hand, the state government fixed a purchase price of Rs 2,500 a quintal and announced some concessions for the state’s sugar sector.
“We are ready to face any action, including arrest, but we would not start operations under the current circumstances,” said Abinash Verma, director-general of the Indian Sugar Mills Association (ISMA). He added mills would not start crushing in UP, or elsewhere, till the cane price was decreased or sugar price increased.
The UP government claimed the various sops announced by it, including sugar levy exemption, purchase tax waiver, relaxation in molasses prices, an interest subvention scheme, entry tax waiver, etc, would lead to a net benefit of Rs 20 a quintal for millers.
ISMA’s Verma, however, maintained the sops would together translate into a mere Rs 10 a quintal benefit, too little to bridge the Rs 55 a quintal gap between mills’ paying capacity (Rs 225 a quintal) and cane price (Rs 280 a quintal).
Meanwhile, at least eight cases were lodged under the Essential Commodities Act against private millers in the Basti and Muzaffarnagar districts of UP. These mills belong to the Bajaj Hindusthan, Triveni, Dhampur and Simbhaoli groups.
“The government would not hold further talks or consider giving more incentives and exemptions,” Bhatnagar added.
UP private millers had held three rounds of talks with the state to break the deadlock, following their reluctance to crush against the cane price of Rs 280 a quintal for the current season.
“The mills have been claiming they will incur losses if they pay more than Rs 225 a quintal, as sugar prices are low. However, we estimate they will not incur any loss, given the benefits that will accrue from the various sops already announced,” Bhatnagar underlined.
He added the government would after three months analyse the financial situation of mills against the backdrop of the prevailing prices of sugar and other sugarcane byproducts and take appropriate action.
Also, in another related development, the government decided to constitute a high-level committee under the chief secretary to evolve a ‘permanent formula’ to fix cane price from the next crushing season and link it with retail sugar price.
At present, 21 mills are operational in UP —16 cooperative ones, four private and a UP State Sugar Corporation unit recently revived by the government with an investment of Rs 10 crore. Of the four private mills, two belong to Indian Potash Ltd and one each to the Wave and Parle groups. Of the state’s 123 mills, 99 belong to the private sector, dominated by Bajaj Hindusthan, Balrampur, Triveni, Birla, etc.
On Wednesday, the Allahabad High Court had directed the UP government to facilitate resolution of the impasse, as it could have “social consequences”.
CUTTING NO ICE
* UP waives purchase and entry tax on sugarcane to placate agitating millers
* Millers say sops do not cover full loss, will not run the mills
* Centre assures it will do everything possible to help millers
* Rangarajan may relook at price-sharing formula
* Sugar farmers agitate in Maharashtra; Karnataka announces floor price of Rs 250 a quintal, to give farmers Rs 150 a tonne support price
The state has fixed new deadlines — of December 4 and 7 for the western and eastern part of the state, respectively — for sugar millers to start operations. UP Principal Secretary (sugar industry & cane development) Rahul Bhatnagar, addressing the media in Lucknow, said action would be taken against the mills that failed to comply with the fresh directives.
In Delhi, Food Minister K V Thomas, who met Prime Minister Manmohan Singh, Finance Minister P Chidambaram and Prime Minister’s Economic Advisory Council Chairman C Rangarajan, assured the Centre would do everything possible, including freeing interest rates on loans, to help millers. Prime Minister Manmohan Singh has already set up an informal group under Agriculture Minister Sharad Pawar to work out a package, expected to be announced in a few days.
In Maharashtra, the country’s largest sugar producer, agitation by sugarcane growers’ organisations for a higher cane price turned violent on Thursday, with activists targeting state-operated buses. In Karnataka, on the other hand, the state government fixed a purchase price of Rs 2,500 a quintal and announced some concessions for the state’s sugar sector.
“We are ready to face any action, including arrest, but we would not start operations under the current circumstances,” said Abinash Verma, director-general of the Indian Sugar Mills Association (ISMA). He added mills would not start crushing in UP, or elsewhere, till the cane price was decreased or sugar price increased.
The UP government claimed the various sops announced by it, including sugar levy exemption, purchase tax waiver, relaxation in molasses prices, an interest subvention scheme, entry tax waiver, etc, would lead to a net benefit of Rs 20 a quintal for millers.
ISMA’s Verma, however, maintained the sops would together translate into a mere Rs 10 a quintal benefit, too little to bridge the Rs 55 a quintal gap between mills’ paying capacity (Rs 225 a quintal) and cane price (Rs 280 a quintal).
Meanwhile, at least eight cases were lodged under the Essential Commodities Act against private millers in the Basti and Muzaffarnagar districts of UP. These mills belong to the Bajaj Hindusthan, Triveni, Dhampur and Simbhaoli groups.
“The government would not hold further talks or consider giving more incentives and exemptions,” Bhatnagar added.
UP private millers had held three rounds of talks with the state to break the deadlock, following their reluctance to crush against the cane price of Rs 280 a quintal for the current season.
“The mills have been claiming they will incur losses if they pay more than Rs 225 a quintal, as sugar prices are low. However, we estimate they will not incur any loss, given the benefits that will accrue from the various sops already announced,” Bhatnagar underlined.
He added the government would after three months analyse the financial situation of mills against the backdrop of the prevailing prices of sugar and other sugarcane byproducts and take appropriate action.
Also, in another related development, the government decided to constitute a high-level committee under the chief secretary to evolve a ‘permanent formula’ to fix cane price from the next crushing season and link it with retail sugar price.
At present, 21 mills are operational in UP —16 cooperative ones, four private and a UP State Sugar Corporation unit recently revived by the government with an investment of Rs 10 crore. Of the four private mills, two belong to Indian Potash Ltd and one each to the Wave and Parle groups. Of the state’s 123 mills, 99 belong to the private sector, dominated by Bajaj Hindusthan, Balrampur, Triveni, Birla, etc.
On Wednesday, the Allahabad High Court had directed the UP government to facilitate resolution of the impasse, as it could have “social consequences”.
CUTTING NO ICE
* UP waives purchase and entry tax on sugarcane to placate agitating millers
* Millers say sops do not cover full loss, will not run the mills
* Centre assures it will do everything possible to help millers
* Rangarajan may relook at price-sharing formula
* Sugar farmers agitate in Maharashtra; Karnataka announces floor price of Rs 250 a quintal, to give farmers Rs 150 a tonne support price
