Sugarcane farmer dues Rs 700-800 cr, says Narendra Modi but data says Rs 5,795 cr

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New Delhi | Published: May 28, 2016 9:45:59 AM

Records as of May 26 — the day Modi made his speech — show that cane dues of UP mills come to Rs 5,795 crore, which is almost eight times the “Rs 700-800 crore” amount mentioned by Modi.

sugarcane farming, sugarcane cultivation in India, sugarcane farmer salary, sugarcane farmer IndiaThe latest data shows that mills have made payments of only Rs 12,201.73 crore. (PTI)

At a show of strength in Saharanpur on Thursday to mark two years of his government — and also to virtually launch the BJP’s campaign for next year’s Uttar Pradesh Assembly elections — Prime Minister Narendra Modi said that the dues to sugarcane growers had reduced, under his government’s watch, from Rs 14,000 crore to hardly Rs 700-800 crore.

“When I took charge (as PM), cane farmers were owed Rs 14,000 crore. We made efforts to ensure they got paid in time. I can say that these dues have to a great extent been cleared, through different schemes of ours. About Rs 700-800 crore of payments are still pending. I am requesting the state government and warning the sugar mills that whatever you have done to farmers for all these years, now you will not be allowed to do,” he said at the Vikas Parva rally.

Data from the Cane Commissioner’s Office in Lucknow, however, tells a very different story.
Records as of May 26 — the day Modi made his speech — show that cane dues of UP mills come to Rs 5,795 crore, which is almost eight times the “Rs 700-800 crore” amount mentioned by Modi.
Records show that during the current 2015-16 sugar season since October, for which crushing is virtually complete, mills in UP have bought cane worth Rs 17,996.73 crore from farmers at the state government’s advised price (SAP) of Rs 280 per quintal.

Given the low realisations of Rs 2,600-2,700 per quintal for sugar at the start of the season, the Samajwadi Party administration had allowed mills to pay the SAP in two instalments. The first Rs 230/quintal installment was to be paid within 14 days of the cane being delivered to the factory, with the balance Rs 50 payable within three months after completion of crushing operations.

The latest data shows that mills have made payments of only Rs 12,201.73 crore. This is below even the Rs 14,815.89 crore that farmers should have got at Rs 230/quintal rate within 14 days of supply.

The big defaulters, accounting for the bulk of the Rs 2,614.16 crore first-installment arrears, include Bajaj Hindusthan (Rs 883.48 crore), Mawana Sugars (Rs 409.58 crore), U.K. Modi Group (Rs 319.20 crore), Simbhaoli Sugars (Rs 288.82 crore), Rana Group (Rs 212.50 crore), Sir Shadi Lal Enterprises (Rs 116.72 crore) and Uttam Sugar (Rs 101.55 crore).

On the other hand, the likes of Balrampur Chini, Triveni Engineering, Dhampur Sugar, K.K. Birla Group, DCM Shriram, Dwarikesh Sugar Industries, Dalmia Bharat Sugar and Wave have made the Rs 230/quintal first-installment payments. They still need to pay the remaining Rs 50/quintal, though.

So, the cane dues of UP mills against the full SAP of Rs 280 per quintal comes to Rs 5,795 crore, not the “Rs 700-800 crore” amount mentioned by Modi.

“The ex-factory realisations of Rs 3,400-3,450 per quintal for sugar will just about allow us to pay the Rs 280/quintal cane SAP. But then, our average realisation for the season (from October) is only around Rs 2,900 per quintal”, said a miller, who has made the Rs 230/quintal first-installment payment.

Many mills, he added, were keen to pay even the balance Rs 50/quintal: “We need some support from the state government from that. They should at least make the UP Power Corporation Ltd (UPPCL) pay us for the co-generation power that we have supplied”.

The industry estimates the dues owed by UPPCL against supplies by mills at an average rate of Rs 4.96 per unit at roughly Rs 1,000 crore.

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