Sugar mills issue SOS to UP govt on cash subsidy

Written by Deepa Jainani | Lucknow | Updated: Sep 20 2013, 08:27am hrs
The sugar industry on Thursday requested the UP government to help it survive the financial crisis by announcing a cash subsidy for the 2013-14 season of R40-R50 per quintal of cane, which can be paid directly to farmers, along with adopting Rangarajan Committee recommendations on linking cane price with the revenue realised from sugar and its by-products.

The plea comes just on time as the state government is in the process of determining cane price for the next crushing season. "Our plea is that the state government announce a holiday on cane prices this year. Let the cane price be the same as last year's, i.e. R280/quintal. And since we have a paying capacity of only R240/quintal, the government should bail us out by announcing a cane subsidy of R40/quintal, which can be paid directly to the farmers. Our humble plea to the government is can you please not hold hands with the farmers and the industry for one year and bail us out of a situation which is killing us" said CB Patodia, president of the UP Sugar Millers Association. "Please let us survive. We are caught in a genuinely bad situation, the likes of which we have not seen in the last 25 years. Cane prices have been exorbitantly high for the last three years while sugar prices are extremely low, and to make matters worse, banks have raised a red flag against the UP sugar industry. We still have uncleared dues to the tune of R2,500 crore pending against last years' cane payments, and with banks not extending us credit for the coming year, we have our backs to the wall. The situation is such that we do not even have the money to conduct our yearly repair and maintenance works at the mills, which is approximately R5 crore per factory. It is in this scenario that we seek the government's help," said Vivek Saraogi, MD of Balrampur Chini, which has 10 sugar mills in the state.

"The situation has reached a point where many mills have stated in confidence that if they do not get some kind of support from the state government, they will not be able to run the factories. And if that happens, it will not only take a huge toll on the state's revenues but also have a cascading effect on farmers," said Abinash Verma, director general of ISMA, adding that the government's positive response to the pleas of the sugar sector is important as it will affect many other sectors as well.

When reminded that this is an election year and politicians of every hue have hiked the cane price as bait to woo the huge farmer community in the state, the millers said, "Is UP any different than the other states where elections are being held Do they not understand the sugar politics Why is cane made out to be a political issue only in UP"

On being asked what the industry would do if their pleas fall on deaf ears, Saraogi said, "Only God can save us then!"