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Harish Damodaran

New Delhi, Oct 21 India’s No. 1 sugar maker, Bajaj Hindusthan Ltd (BHL), told farmers that it can pay only Rs 60 per quintal for the cane supplied by them in the 2007-08 season (October-September).

This is lower than the Rs 125-130 price fixed (‘advised’) by the Uttar Pradesh Government during 2006-07, and the Centre’s statutory minimum price (SMP) of Rs 85-90 for the current season, at an average sugar recovery of 9.5-10 per cent. In an ‘appeal’ issued to all its ‘farmer brothers’, BHL — which produced 15 lakh tonnes (lt) of sugar during last season, out of the country’s total 282 lt and UP’s 85 lt — has made a fervent case for linking cane prices to realisations from sugar.

“All of you know that apart from cane, mills also have to provide for workers’ salaries, plant maintenance, interest on loans and depreciation. Mills, thus, have the capacity to pay only 55-60 per cent of what is realised from sugar as cane price,” the ‘appeal’ — in Hindi and made in the name of the ‘Bajaj Hindusthan family’ — has said.

Ahead of the crushing season , ex-factory sugar prices are ruling between Rs 1,250 a quintal in eastern UP and Rs 1,350 in western UP. According to BHL, once the new season takes off, prices are likely to fall to Rs 1,000 a quintal. “Under the circumstances, it is becoming clear that only a cane price of Rs 60 per quintal or thereabout can be paid.” Paying more would lead to mounting losses and the eventual closure of mills, it said

Claiming that the mills have had a ‘sweet relationship’ with the growers and they are both part of ‘one family’, the BHL communication has said “it is in everybody’s interest to link cane prices to sugar prices”.

Meanwhile, the UP Government has issued recovery certificates (RCs) to 63 private mills that have defaulted on cane payments for the previous 2006-07 season. These include 45 mills that were served RCs on Friday, ahead of a crucial hearing by the Allahabad High Court on October 23.

A two-judge Lucknow bench of the Court had, on September 25, directed the State Government to ensure full payment of cane arrears by mills within three weeks. The latter was also asked to file an affidavit of compliance before the next October 23 hearing.

The issuance of RCs empowers the district authorities to seize control of the sugar stocks, plant and machinery, land and bank accounts of a defaulting mill and recover cane dues through arrears in land revenues.

The 63 mills include those belonging to BHL, Balrampur Chini, Triveni Engineering, KK Birla, DSCL, Simbhaoli and other leading combines.

Private mills owe cane growers roughly Rs 1,100 crore out of the Rs 9,100 crore payable in 2006-07.

Among the few to have paid up so far are the Bahadarpur and Bundki factories of Dwarikesh Sugar Industries, the Shamli and Unn plants of Sir Shadi Lal Enterprises, and the Pilibhit unit of L.H. Sugar Factories Ltd.

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