Piling up

A record sugar production in Uttar Pradesh fails to sweeten the mood as arrears reach ₹9,600 crore  

Published 6 years ago on Mar 27, 2018 2 minutes Read

Fourteen days and not a day longer – was a declaration made in the BJP party manifesto prior to the Uttar Pradesh assembly polls last year and a crucial clause in the UP Sugarcane (Regulation of Supply and Purchase) Act of 1953. Yet, as the Yogi Adityanath government completes a year this month at the helm of the country’s largest sugar producing state, the on-ground reality is quite grim.

The state has surpassed its expectation of sugar production and reached a record 9 million tonne for the current crushing season that is set to end in April. This of course is courtesy an average monsoon last year combined with large-scale planting of high-yield cane varieties. Sugarcane farmers have even been fortunate enough to have the state increase the price from Rs.305 to Rs.315 in October last year. Everything seems to be adding up so far but the narrative has a bitter-sweet ending.

Let alone the higher state advised price for the current crushing season, farmers are yet to receive dues for the produce delivered last fiscal to the 119 mills in the state. Fall in sugarcane prices over the past few months has eroded the profit margin of mill owners, who currently are reeling under the pressure of dues worth Rs.9,600 crore. The state government has issued a 14-day deadline for mills to clear pending dues in order to placate the restive farmer community, a huge voter bloc for the government.

Keeping in line with the state of affairs across the country, the incumbent state government claimed to have granted a loan waiver to 86 lakh farmers of Rs.36,000 within six months of being elected. A move that appears to be a farce given that only 34,262 ended up receiving relief of Rs.1-Rs.1,000. Following set precedence, the Uttar Pradesh Sugar Mills Association has requested the government for a bailout package via a staggered cane payment system, waiver in cane society commission and a Rs.30/quintal subsidy for cane crushed.

With no respite in sight for mill owners and sugar cane farmers and given the historically slow pace of payment of dues, that figure is only set to rise at the end of the two-week grace period.