Cane dues: Five UP mills in the dock

Written by Deepa Jainani | Lucknow | Updated: Aug 30 2013, 07:34am hrs
Pulled up by the Allahabad High Court for not taking action against sugar factories for their failure to pay farmers dues for cane purchases four months after the crushing season was over, the Uttar Pradesh government on Thursday issued recovery certificates (RCs) against five mills with maximum cane arrears.

The five mills are Neoli, Naglamal, Gadaura, Bilari and Nawabganj. Apart from these five, two other offending mills of the Modi group were to be issued RCs, but they were let off at the last moment after they gave an undertaking that they would pay the interest on the late payments with effect from July 1. The two factories are Modinagar and Malakpur. The total cane dues of the sugar industry in Uttar Pradesh stand at R2,600 crore.

According to rules, if sugar mills do not pay farmers money within 14 days of purchasing cane, they have to pay a 15% interest over and above the arrears. This applies to all sugar mills, be it in the private sector or the state sugar corporation or sugar co-operative mills. And once the RCs are issued, the district administration has the right to recover the cane dues of the defaulting mills by auctioning their sugar stocks to raise the money, which will then be used to clear the arrears.

According to department insiders, with the court adopting a tough stance on the non payment of cane dues, the government had no option but to take action, especially against those who were the worst offenders. As per statistics available from the cane department, while Malakpur had paid only 54.03% of its total cane dues and had dues amounting to R127 crore, while Neoli had paid 57.41% and had dues close to R18 crore, Nawabganj had paid 60.02% of its cane dues and still had approximately R22 crore dues, while Modinagar had paid 68.29% of its cane price and still had R70 crore to pay, Bilari had paid 70.26% dues and had to clear R22 crore still, Gadaura had cleared 71.34% of its cane payments and had to pay R26 crore still and Naglamal had cleared 71.60% of its payments and had R56 crore pending.

While Mawana and Naglamal, both belong to the Mawana group, are located in Meerut district of western UP, Malakpur in Baghpat district and Modinagar in Ghaziabad, both belong to the UK Modi group. The rest of the factories are individual units.

An industry insider said all these seven factories have been habitual offenders and even within the industry, there is no one who will shed a tear for them.