Mills owe sugarcane farmers Rs 1,800 cr

Arrears for the current cane crushing season (Oct-Sep) have crossed Rs 1,000 cr; Rs 800 cr for the last season.

Sugar mills in Uttar Pradesh have piled up sugarcane arrears of over Rs 1,000 crore in the current sugar season (October-September).

This is unlike last season, when arrears had started accumulating March onwards. The state accounts for almost one-third of the country's sugar output and has about 7 million farmers engaged in sugarcane cultivation.

As on Friday, the state sugar mills owed Rs 1,009 crore as arrears to farmers for the sugarcane they are buying in the current season.

Among the large groups, Bajaj Hindusthan has the biggest share (Rs 222 crore), followed by Dhampur Sugar (Rs 73 crore), Triveni Engineering (Rs 67 crore), KK Birla group (Rs 53 crore), Mawana Sugars (Rs 40 crore) and Simbhaoli Sugars (Rs 22 crore) in the total arrears.

Significantly, the arrears are building as the high court declared interim sugarcane price of Rs 110 a quintal, as against the state advised price (SAP) of Rs 125-130 a quintal that mills paid last year.

Worst hit are the 7 million plus sugarcane farmers, a majority of whom have still not been paid the last year's dues. Moreover, the mills delayed their crushing by a month due to their differences with the state government over sugarcane price. The delay had forced many farmers to dump their sugarcane at gur units at throwaway prices in an urgency to vacate fields for sowing of wheat.

Most of the mills have yet not made full payments for the sugarcane they purchased in the last season. They collectively owe over Rs 800 crore to the farmers for the last crushing season. The state government has issued fresh recovery certificates against 6 units of Bajaj Hindusthan on Friday for non-payment of last year's arrears.

Interestingly, there are some companies who have made full payments for the sugarcane purchased this season. Balrampur Chini, the country's second largest sugar producer, has made a payment of Rs 312 crore while DCM Shriram Consolidated Ltd has paid Rs 140 crore.