Uttar Pradesh sugarcane farmers’ dues have touched Rs 4,436 crore in the ongoing 2011-12 crushing season.
The dues are pending on both the private and cooperative sugar mills numbering about 125.
Taking cognisance of the situation, the government has asked the sugar mills to provide their payment schedules, while directing them to speed-up payments. Interestingly, cooperative mills are bigger laggards in clearing farmers’ dues. They have collectively paid about Rs 686 crore against total dues of Rs 1,220 crore, which is 56 per cent payment. The private mills have paid about Rs 9,103 crore against Rs 13,005 crore, which is about 70 per cent.
However, it has to be borne in mind that sugar mills, as per rules, get 14 days to settle sugarcane payments without inviting interest penalty.
The state’s sugar production stands at 5.35 million tonnes (MT) and so far 60.15 MT of cane had been crushed. The recovery rate this season stands at about 8.86 per cent, lower than 9.01 per cent last year.
Industry body Indian Sugar Mills Association has said that UP sugarcane arrears had reached “uncomfortable levels” mainly due to higher cane prices in the state.
Besides, the recovery had been lower this year, since the government had ordered mills to operate “very early”, which had resulted in losses and lower revenue realisation from same quantity of cane crushed.
This year, UP is targeting sugar output of 6.5 MT against 5.9 MT during 2010-11. State cane commissioner Kamran Rizvi is confident that the crushing season would extend beyond April 15.
On November 8, 2011, UP had hiked cane State Advised Price (SAP) by almost 20 per cent. The price of early variety of cane was increased Rs 40/quintal to Rs 250/quintal.
SAP of common variety, which accounts for over 60 per cent of total cane production, was increased by Rs 35/quintal to Rs 240/quintal. Early variety and rejected variety of cane account for about 20 per cent of production each. The price of rejected variety was fixed at Rs 235/quintal.
The government feels the hike would result in cane payments of over Rs 15,000 crore to farmers during 2011-12 crushing season against Rs 13,000 crore last year much to the consternation of millers.
