He alleged that the non-transparent mechanism for freesale sugar has worsned the situation as it isi not equitable across the country. Sugar from southern and western India is hitting hard the profit margins of the mills located in north India. Besides the high cane prices in north India is another cause of eating into the profitability of the mills.
He said in such a situation in UP alone the cane price arrears to be paid to farmers have accumulated to Rs 614 crore. Sugar mills in UP could manage to clear up Rs 4,480 crore, leaving a balance of Rs 614 crore. Of Rs 614 crore arears, Rs 158 crore are to be paid by state mills, Rs 206 crore by cooperative sugar factories and Rs 249 crore by the private sector mills. He said that cane crushing this year is likely to be lower by 10 per cent.
To remedy the situation, he said the government should create a buffer stock of 20 lakh tonneof sugar, give priority sector status to sugar for enable mills to acess easy credit, promote exports in a big way .