The deadlock over the sugarcane pricing issue in Uttar Pradesh continues with talks between the State Government and sugar mills ending inconclusive late on Tuesday evening.

The State Chief Secretary will meet the mill representatives again in Lucknow tomorrow to break the logjam.

In a related development, Prime Minister Manmohan Singh told a delegation of all parties from Maharashtra that a Ministers’ panel will look into the problems of sugarcane growers and the sugar industry.

Maharashtra Chief Minister Prithviraj Chavan, who led the sugar industry delegation to meet the Prime Minister, said that the three-member panel, consisting of Sharad Pawar, P. Chidambaram and Ajit Singh, will study the issue and submit a report to the Cabinet soon.

The delegation told the Prime Minister that sugarcane crushing has been delayed this season that began in October due to farmers’ agitations for higher price. The delegation said the State government had engaged them in consultations at various levels, but it could lead to a serious law and order problem in the State if remedial measures were not taken.

Sudhir Panwar, President of Kisan Jagriti Manch, said that the private sugar mills could dilute their stand if the Uttar Pradesh Government accepts a couple of their demands.

“They are seeking subsidy, bank guarantee, scrapping of entry tax and relief on molasses. The industry is trying to wrest concessions to the tune of Rs 10,000-15,000 crore,” he said, adding that the Centre could extend further concessions to the sector.

PTI quoting Food Secretary Sudhir Kumar reported that the Food Ministry will soon seek the Cabinet’s nod for providing interest-free loans to sugar mills.

“If banks come forward, we will pay the interest accrued on loans from the Sugar Development Fund. The fund has about Rs 1,200 crore with it,” he said.

The pricing issue has taken a violent turn with farmers owing allegiance to the Bharatiya Kisan Union locking up the premises of Bajaj Hindusthan in Noida on Monday. They also locked up an automotive showroom belonging to Uttar Sugar Mills.

According to trade sources, the industry has never witnessed such a scenario before.

“Farmers in Maharashtra are refusing to supply cane demanding higher prices. Sugar mills in Uttar Pradesh are refusing to start crushing operations demanding rollback of support price. It is total chaos and we expect the issue to go to the Supreme Court,” said a trader, adding that some farmers in eastern Uttar Pradesh are selling the cane to jaggery makers at prices ranging between Rs 135 and Rs 200 a quintal.

A petition filed by V.M. Singh, Convener of the Rashtriya Kisan Mazdoor Sanghatan, in the Allahabad High Court demanding that the Uttar Pradesh Government take over sugar mills in the State will come up for hearing on Wednesday.

While farmers in Uttar Pradesh are demanding Rs 300 a quintal against Rs 290 a quintal paid last year, the mills wanted it lowered to Rs 225. Led by the Indian Sugar Mills Association, private mills’ apex body, millers say that their units will turn unviable at current prices since they are already making a loss of Rs 4 for every kg of sugar they sell.

Farmers, on the other hand, have been contending that their input costs have gone up, particularly with diesel and labour turning costlier.

Millers are also demanding the implementation of recommendations of the Rangarajan panel, which mooted the industry sharing 70 per cent of the value of sugar and other products, including bagasse, molasses and press mud, with growers.

While the Centre fixes a fair and remunerative price (FRP) that mills have to pay growers, States came up with an advised price higher than FRP. In Uttar Pradesh, the State Advised Price was raised from Rs 125 a quintal in 2007-08 to Rs 280 in 2012-13 by the Mayawati government. This year, the Akhilesh Yadav Government has kept it unchanged following pressure from the mills.

In Maharashtra, too, farmers have been demanding Rs 300 a quintal and refused to supply cane to mills. As a result, only 96 units of the 170 in the State have begun crushing operations.

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