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The 95-odd private sugar mills in Uttar Pradesh have decided to crush no sugarcane till the Uttar Pradesh government concedes two main demands of theirs, which they’ve been pressing for a long while.
They’ve said they will not begin the crushing of cane in the 2014-15 season, scheduled to start from October, unless the state government agrees to link its mandated price for the latter to the market price of sugar. And, to stop its ongoing coercive action against mills for not clearing past arrears to farmers for cane.
Linking the (state-set) price of cane to that for sugar was one recommendation in the October 2012 report of the committee headed by C Rangarajan, then the chairman of the Prime Minister’s Economic Advisory Council. As for the arrears to farmers, the mills say there is no way they can pay, since the floor price set for cane by the state government is so unrealistic. They allege their loss on this account is Rs 5.50 for every kg of sugar sale. In a press conference here on Tuesday, almost all the leading lights of the Rs 30,000-crore sugar sector in UP were present. And, alleged the Akhilesh Yadav government had gone back on almost all the promises made to them last year, when they’d suspended operations on the same issue.
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“The repair and maintenance work would be stopped henceforth and staff withdrawn. Individual mills would also be submitting their notices to the state government hereafter,” a statement said
Among those present at the meet were Kushagra Bajaj, joint managing director of Bajaj Hindustan; Vivek Saraogi, managing director of Balrampur Chini Mills; Goutam Morarka of Dwarikesh Sugar, Balram Adhlakha from Uttam Sugar, Ajit Shriram of DCM Shriram and Tarun Sawhney, vice chairman and managing director of Triveni Engineering and Industries.
In India, the central government suggests a ‘Fair and Remunerative Price (FRP)’ each season for cane. State governments may choose not to follow this and to compel mills to pay a higher price for cane. UP, the country’s second biggest sugar producing state (Maharashtra is first), had fixed a cane rate for the 2013-14 season which was almost Rs 50 a quintal more than the Centre’s FRP. The mill heads said sugar prices had fallen in both the home and foreign markets, leading to mounting losses. Mills are estimated to have cane arrears estimated to be at least Rs 5,000 crore by the end of the current sugar season, to conclude at the end of next month.
“To stop this problem from recurring, the UP government should immediately link sugarcane prices to sugar prices for the 2014-15 season,” said Saraogi of Balrampur Chini.
“In the past four years, the UP government has raised the sugarcane SAP (State Advised Price) by almost 70 per cent, while sugar prices have increased by only seven to 10 per cent. Which is why we are unable to pay the farmers,” said Abinash Verma, director general of Indian Sugar Mills Association.
C B Patodia of the Association’s UP unit said factories in the state had begun crushing cane last year after an assurance by the state government. These included constitution of a committee to recommend a rational cane pricing formula by April, financial assistance of Rs 9 a quintal of cane and, above all, a stay on all coercive action by the government on mills to compel payment of arrears. However, the millers alleged, nothing had moved forward on the assurances.
In a related development, representatives of cooperative sugar mills in UP are believed to have met Union food minister Ram Vilas Paswan recently. It is reported that a meeting is likely next week with both private and cooperative sugar mill executives.
