The industry's worsening conditions have been triggered by factors such as years of bumper cane harvests and record sugar production
Sugar cane arrears of farmers in Uttar Pradesh stand at a whopping Rs 9,536 crore as on April 18. This is despite the central government’s announcement of a soft loan package of `3,000 crore for mills in UP and an additional package of Rs 500 crore from the state government to 24 cooperative sugar mills for settling the arrears.
Principal secretary for sugarcane and cane commissioner Sanjay Bhoosreddy had been rather emphatic that the dues would come down to Rs 4,500 crore-5,000 crore by April 5, when he hoped that almost all the 93 sugar mills that had applied for the soft loan would be sanctioned by the banks. But, despite all efforts, cane dues have refused to come down, primarily because even as mills are making the payments, continuous crushing is adding new arrears every day.
According to the data from the cane commissioner’s office, the 117 private sugar mills in the state, including 24 of the cooperative sector, have crushed 932.14 lakh tonne of cane till April 18 to produce 107.07 lakh tonne of sugar. While the mills have already paid Rs 17,905.29 crore, which is 65.25% of the total arrears, they still have `9,539 crore left to pay after the 14-day period. Of this, the private sugar mills owe Rs 8,955.41 crore while the cooperative sugar mills have Rs 526.12 crore arrears.
According to insiders, 16 mills out of the total 117 have already shut but the season is still a long way to go, with crushing likely to extend up to the end of May. “The state is most likely set to breach last year’s production of 120.50 lakh tonne of sugar, especially due to an unprecedented increase in the recovery percentage, which is 11.49% this year, as compared to 10.84% last year,” said an official of the cane department.
Delayed cane payments have become a thorny issue for the state government, which had come to power on the promise of getting the mills to pay farmers their sugarcane price within 14 days of selling the produce to factories.
Finding itself in a tight spot, chief minister Yogi Adityanath’s government continues to issue statements as “an unprecedented payment of `62,000 crore have been made to cane farmers since the government took over in March 2017”. But the fact remains that in an election year, the approximate 40 lakh sugarcane farmer families are not enthused with such claims.
The industry’s worsening conditions have been triggered by factors such as years of bumper cane harvests and record sugar production, coupled with high cane prices and sluggish domestic prices.