Recovery proceedings in offing against millers
The Akhilesh Yadav-led Uttar Pradesh government on Monday reiterated its firm position that recovery certificates (RCs) would be issued against erring sugar mills, if they failed to settle cane arrears within the stipulated 15 days.
Cane arrears of about Rs 1,500 crore pertaining to the 2011-12 crushing season is pending on millers with majority of the defaulters in the private sector.
On July 31, the state government had apprised a farmers’ delegation here of its decision to take tough action against defaulting private sugar mills. This sets the compliance deadline to August 15.
Meanwhile, farmers’ leader V M Singh has also filed a PIL before the Lucknow Bench of the Allahabad High Court praying for immediate cane payments along with interest. He also prayed for direction to the government to withhold recovery proceedings against farmers by cooperative banks on agricultural loans until arrears had been settled.
The PIL was heard by a division bench comprising Justices Uma Nath Singh and Virendra Kumar Dixit.
The government counsel submitted in the high court that it was preparing to issue RCs against mills, in case they failed to repay within the stipulated time frame. It would take another 15 days to issue the RCs and take other necessary action for compliance, said the government counsel.
The case will be heard in the first week of September.
Talking to Business Standard, petitioner V M Singh alleged the state government lacked the nerve to act against the mills.
“While RCs have not been issued against mills, recovery proceedings are on against farmers over agri loan. In fact, maximum number of RCs had been issued against farmers this year compared to the last five years,” he claimed.
This year, total cane dues had touched Rs 18,200 crore against Rs 13,000 crore last year on higher production and cane price. Of the 101 private sugar mills, about 15 units had settled full cane dues so far.
On the other hand, the mills have also reiterated demand over their power co-generation on UP Power Corporation Limited (UPPCL), so that the same could be ploughed back to the farmers.
The millers supply bagasse-based power generated to UPPCL under power purchase agreement (PPA) against set tariffs.
The power dues pertaining to February, March, April, May and June 2012 stand at Rs 166 crore, Rs 155 crore, Rs 101 crore, Rs 84 crore and Rs 55 crore respectively, which collectively is Rs 560 crore. Recently, the UPPCL had cleared co-generation dues of Rs 92 crore for January 2012.
In a recent meeting with the UPPCL mandarins, UP Sugar Mills Cogen Association had urged for immediate release of the dues.
During 2011-12, UP’s sugar output had touched 6.96 million tonnes (MT) against 5.88 MT last year. All the 123 functional mills in the state had crushed 76.74 MT of cane with the recovery percentage standing at 9.07 per cent; lower than 9.14 per cent last year.
