The Centre on Thursday asked the Uttar Pradesh government to initiate ?tough action? against sugar mills if they fail to clear cane arrears worth R5,300 crore by next month. Coming on the back of the Allahabad High Court’s order to offload a portion of the sugar stocks held by mills in next three weeks and a part of the proceeds be given to farmers for clearing cane arrears, and the state government’s reluctance to link the price of cane to that of byproduct, the latest warning from the Centre is only going to complicate the matter for mills.
After a meeting with the officials from state governments and the industry, food minister Ram Vilas Paswan also re-affirmed the promise of offering additional incentives to mills, including additional subsidised loans of around R4,400 crore and almost tripling the import duty on sugar to 40%, will be notified only after the industry submits an undertaking assuring the government that the mills will clear the cane arrears. Sources said the minister has now sought a detailed road map as to how the UP mills wish to clear the arrears, after the industry conveyed that it had submitted an undertaking to pay the dues twice with the food ministry.
The warning to mills came barely a week after Paswan, responding to a call attention motion in the Lok Sabha, had advised the Uttar Pradesh government to refrain from fixing very high cane price if it couldn?t ensure timely payment to the farmers and if mills were not in a position to clear cane arrears quickly. He had said while the Centre fixed the benchmark price for cane at R210 per quintal for the current marketing year through September, the UP government set the state-advised price (SAP) at R280 for the year, or 33% higher.
“So far, the UP government has taken soft action against defaulting mills and the state should go tough on mills and ensure they clear the entire cane arrears in 15 days,” Paswan told reporters on Thursday. The Centre does not want to interfere in state subject but farmers are “very unhappy’ over non-payment of arrears, he added.
Of the total cane arrears of R8,703 crore so far, UP alone accounts for as much as R5,304 crore with five mills ? Bajaj Hindusthan, Mawana, Modi, Simbhaoli and Shamli ? owing the most, the minister added.
Bajaj Hindusthan led the pack with arrears of R1,527 crore, followed by Mawana Sugars (R566 crore), Modi Sugar Mills (R418 crore), Simbhaoli Sugar Mills (R273 crore) and Shamli Sugar Mills (R157 crore).
