)
The sugar industry in Uttar Pradesh (UP) may decide not to crush cane in the coming season if the Akhilesh Yadav government doesn’t concede to their demand to bail out the beleaguered sector.
The industry claims it has incurred a loss of Rs 4,000 crore over the past two years. According to industry sources, they were not in a position to pay cane arrears of about Rs 2,500 crore pertaining to the 2012-13 crushing season.
“Owing to our precarious financial situation, banks are not allowing us credit and sugar companies are not able to conduct routine repairs and maintenance work in mills, which is customary before the start of crushing,” said Vivek Saraogi, managing director, Balrampur Chini Mills Limited.
The industry has been demanding sugarcane prices be linked to sugar prices in UP, which accounts for about 30 per cent of India’s sugar output. Saraogi added that the sugar industry generated direct revenue of Rs 6,000 crore a year to the state government and supported the livelihood of almost 40 million people.
Indian Sugar Mills Association’s (ISMA) director-general Abinash Verma demanded Rs 2,400 crore subsidy to clear arrears of 2012-13. According to him, at a time when there is a glut in the sugar market with sugar prices keeping flat and even falling, the mills can’t pay beyond Rs 240 a quintal. “We request the state government to provide cash subsidy of Rs 40-50 per quintal of cane for the coming crushing season,” Verma added.
There are over 100 private mills in UP. Last year, the state had fixed cane price at Rs 280 a quintal for the common variety of cane.
The millers had earlier filed a petition in Allahabad High Court seeking direction to the government to announce state cane price before starting the cane reservation meetings, which have already started despite mills’ objection.
Kisan Jagriti Manch president and Lucknow University professor Sudhir Panwar said while the growers were supportive of the sound financial health of sugar industry, it should not be at the cost of farmers.
“The demand of sugar industry to link cane prices with sugar is illogical because in every industry, it is the raw material price which decides the price of final produce and this is the very basis on which farmers and state government rejected the Rangarajan recommendations,” said Panwar.
He added the Centre and state governments had conceded to almost all the demands of the industry last year, but the industry is not clearing arrears, which according to him is “unfortunate and will affect cane production in long-run”.
He noted the industry wanted to transfer losses to farmers, but never transferred profit during “favourable years”.
On Wednesday, Yadav had informed the state assembly that over Rs 6,340 crore was pending as cane arrears from 1994-05 to 2012-13, of which Rs 5,600 crore was pending on private sugar mills alone and the remaining with cooperative units.
The 121 mills in UP produced nearly 7.47 million tonnes (mt) of the sweetener – 7 per cent higher compared to last year’s sugar output of 6.97 mt.
