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UP cane arrears still at Rs 11,000 crore; big private mills owe 55%.

Date: 25-08-2020
Subject: UP cane arrears still at Rs 11,000 crore; big private mills owe 55%
Uttar Pradesh is bracing for another sweet riot. The new sugar crushing season just 36 days away, but sugar mills still have Rs 11,000 crore of unpaid dues piled up.

According to data accessed by FE, as on August 21, 119 sugar mills that operated in this season have just paid 70% of their 2019-20 cane dues to farmers and have approximately Rs 11,000 crore pending.

And the laggards among private players who have payed less than 50% are the usual defaulters: Yadu group has paid 15% of cane dues and owes Rs 111 crore to farmers, Simbhaoli group has paid 24% and still owes Rs 590 crore and Modi group has paid 27% of dues and has Rs 568 crore pending.

The Bajaj Group, which is the largest group and has 14 sugar mills in the state, has paid only 39% of its total dues and has Rs 3,200 crore pending. The Wave group has paid 57% of dues and has Rs 379 crore pending, Rana group has paid 63% and still owes Rs 383 crore and Mawana has paid 65% and has Rs 346 crore pending.

Apart from these groups, there are some individual ones which have also defaulted on cane payments. Aira sugar mill has paid 33% and owes Rs 295 crore, Shamli has paid 45% and has Rs 214 crore pending and Baheri has paid 63% and owes Rs 148 crore.

Together, these players owe farmers nearly Rs 6,234 crore, which is nearly 55% of the total dues of Rs 11,000 crore. And try as they might, it would be next to impossible for them to clear the entire dues before the start of the fresh season.

According to the data, 24 cooperative sugar mills owe Rs 1,133 crore and the 3 sugar corporations owe Rs 166 crore. Interestingly, the UP government on Friday come to the rescue of coop sugar mills and released Rs 500 crore in form of loan to enable them to pay cane dues to farmers.

“The state government is sensitive to the cane price payment of sugarcane farmers, and keeping in view the payment capacity of the cooperative sugar mills, a financial assistance of Rs 500 crore is provided as a loan to them for timely payment of the cane price. This amount will be allocated to 24 cooperative mills and transferred directly to the accounts of cane farmers,” additional chief secretary at the sugar industry and cane development Sanjay Bhoosreddy said.

However, the issue of non-payment of cane dues within 14 days of cane supply, as stipulated by the Sugarcane Control Act, has been a nagging point, both for farmers as well as the government. And experts feel that despite all efforts, UP is likely to start the new crushing season with an outstanding of around Rs 4,500-5,000 crore.

“Sugar mills in UP are expected to get Rs 2,500 crore from the central government on account of buffer subsidy and export subsidy and another Rs 900 crore from power dues. That will take care of approximately Rs 3,500 crore of cane dues. But, mills still have to pay nearly Rs 7,000 crore more. It is highly unlikely that they will be able to pay more than Rs 2,000 crore by October 1, when the new season starts,” said a miller on condition of anonymity.

Some better managed groups have diversified their business and have paid well above 75% of their total dues. “There is a lot of disparity in the payments made by various sugar mills in UP. While some have paid 90%, there are others who have paid less than 25%. It is rather frustrating that while we are making every possible effort to pay the farmers on time despite odds, there are some mills which are defaulting on the payments with impunity,” said a miller with a large presence in the state.

Source:- moneycontrol.com

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