The Uttar Pradesh sugar industry has started showing signs of crumbling under the strain of the policies of the Mayawati government. This time it is not sugarcane, but the disposal of molasses. As per the new molasses policy it is to be disposed of in the ratio of 1:3, giving the liquor industry ample leverage, resulting in molasses overflow situation in most of the sugar mills in the state. In a letter to the state government on January 31, secretary of the UP Sugar Mills Association (UPSMA) Shyam Lal Gupta urged the government to ??exempt the sugar mills from the supplying of molasses in the ratio of 1:3 at least during the current crushing period??.
Gupta said the exemption will help mills smooth working. He also assured the state government that if exempted, the mills will ??maintain adequate stock of molasses for distilleries throughout the year as per their quota.?? He shared that several mills have informed the country liquor manufacturers are not coming forward to buy molasses against their 25% allocation as they do not need it.
It may be mentioned that as per the Molasses Policy 2010-11, as much as 25% molasses production has been reserved for country liquor and is to be supplied by the mills in the ratio of 1:3. The molasses production last year was 291 lakh quintals which is estimated as 310 lakh tonne this year as the production of sugarcane has gone up. The actual consumption of molasses for country liquor in 2009-10 was 31.68 lakh quintals, the 25% reserved for country liquor will be more than 75 lakh quintals, which is more than double the requirement of the liquor industry. The reserved quota far exceeds the requirement and hence the disposal of that one part becomes an acute problem for the industry. The sugar factories are compelled to sell molasses to the liquor lobby at throwaway prices or face overflow situation.
In the current scenario, the reserved price of molasses had been prevailing (from November to January) at about Rs 45/quintal as against Rs 270 offered for free sale molasses. However, as the molasses overflow situation is arising in most of the sugar mills, they are compelled to sell the reserve molasses at Rs 20-25 per quintal to avoid overflow.
??This is an arm twisting measure of the liquor lobby with the patronage by the state government, there is no reason why this 1:3 ratio has been worked out in the first place,?? says yet another agitated miller who is facing a tough time in managing the molasses overflow.
The state cabinet had fixed the molasses price at Rs 330/quintal up to March 31, 2011 for manufacture of country liquor, against which only Rs 20-25 are being offered in the present scenario, thus enabling the liquor lobby to make huge profits.
??Sugar is the only industry that is in existent in UP. It is, in fact, the backbone of the state?s economy. But with the state government blatantly favouring the liquor industry, which is an offshoot of the sugarcane industry, the mother industry has started languishing and if things continue like this, it will soon start falling apart,?? said a miller requesting anonymity.
