Four sugar companies account for nearly 45% of UP’s cane arrears

Even as Uttar Pradesh stands on the verge of starting a new sugar season with baggage of Rs 8,077 crore cane outstanding, it is interesting to note that merely four sugar companies/groups account for holding up almost half of the cane payments to be made to farmers in the state. These mills have paid only 50% or lesser of their total cane arrears.

According to data, as on October 9, Bajaj Hindusthan, which has 14 sugar mills in the state, has paid 52% of its cane dues and has sugarcane arrears of Rs 25,278 crore, while Simbhaoli Sugars, with three sugar units, owes Rs 485 crore, having paid 37% of its total cane arrears. Modi Sugar, which has two sugar mills, has dues of Rs 467 crore and has made 40% payments, Yadu group with Rs 98 crore pending has 2 units and paid only 26% of its total cane dues.

Together these four groups, having between them 21 sugar mills, owe the farmers `3,578 crore, which is nearly 45% of the total cane dues. Of the remaining 98 sugar mills in the state, 63 mills have paid more than 85% of their dues, while four mills have cleared their total cane dues.

The Uttar Pradesh cane commissioner has meanwhile issued recovery certificates against one sugar mill of each of these four groups, for not making timely payments to the farmers. The cane commissioner has also forwarded a certificate specifying the amount of arrears plus interest the due from the occupiers of these mills to the district magistrates (DM) where these mills are located, asking them to proceed to recover the dues specified and treat it at par with arrears of land revenue.

Talking to Financial Express, a mill owner requesting anonymity said a majority of the mills have cleared more than 80% of their dues and that they are waiting for the state government to clear their long-standing cogen dues and the subsidy amount from the central government to clear the remaining dues. “The industry can be divided into two. The habitual defaulters and the progressive millers. Every season it is the same story of a handful of habitual defaulters pulling down the entire industry in UP,” he said, adding that the entire industry has to bear the brunt for the mismanagement of a few mills.

According to Commissioner, Cane and Sugar, Sanjay Bhoosreddy, while strict action is being taken against those who have been negligent in cane price payment, the industry is soon likely to clear all its outstanding. “The sugar mills will get about `3,000 crore from three Government of India schemes, such as buffer subsidy, production subsidy, transport subsidy and MAEQ, which will be directly transferred to the account of farmers. Similarly, about Rs 1,000 crore would be received against the co-gen dues from the energy department, which too, shall be sent directly to the accounts of farmers. Once that is done, the payment of these sugar mills will reach 100%,” he said, adding that the Government is committed to ensuring timely payment to cane farmers of the state.

This action comes in the wake of the Allahabad High Court’s recent order in the case of Rudhauli sugar mill of Bajaj Hindusthan, in which it came down heavily on the cane commissioner for “failing to discharge his statutory obligation” of issuing a recovery certificate and forwarding it to the collector for recovery of cane dues from the sugar mill.

“The right to receive payment of sugar cane price and interest, if any, is a statutory right of cane-growers under Section 17 of the Act,” the court stated, and ordered the DM of Basti district, where the sugar mill is located, to take action against the directors and occupiers of the mill, including their arrest, to recover the dues if they are not made by November 7, the two month grace period granted by the court to the mill to clear the dues.