With the Akhilesh Yadav Government refusing to budge on cane price, sugar mills in Uttar Pradesh on Sunday agreed to start crushing operations over the next few days.

The over 10-day stand-off between the mills and the UP Government eased with the State sticking to its price of Rs 280 per quintal but agreeing to the millers’ proposal of splitting payment in two tranches in view of the prevailing low sugar prices.

It also extended some relief in the form of waiver of entry tax and purchase tax, while bearing the burden of the cane society commission.

The UP mills have decided to make cane payment of Rs 260 per quintal in the first instalment to farmers and the remaining Rs 20 by the end of the crushing season.

The Government had kept the State advised price (SAP) flat at last year’s level of Rs 280 per quintal for 2013-14, which the millers had refused to accept and announced a shutdown of operations. This resulted in a major crisis with farmers resorting to an agitation across the State.

The UP Government has directed mills in western UP to start crushing by December 4 and in the rest of the State by December 7, according to an official statement.

“The sugar industry of Uttar Pradesh at the initiative of the Chief Minister and in the larger interests of lakhs of farmers, announced the commencement of crushing operation for season 2013-14, despite operations being unviable at the present cane price,” UP Sugar Mills Association (UPSMA) said in a statement.

The UP Government has agreed to waive entry tax, purchase tax and society commission on cane amounting to a total of Rs 11 per quintal, UPSMA said. The sugarcane economy is estimated at Rs 22,500 crore in UP on which about 32 lakh farmer families and over 2 lakh workers are directly dependent for their livelihoods.

UPSMA also said that the State Government has assured that a long-term viable cane price fixation formula would be worked out so as to ensure long-term viability and the growth of the industry.

“It is a big relief to farmers as it has ended the uncertainty on crushing,” said Sudhir Panwar, President of Kisan Jagriti Manch.

Meanwhile in Maharashtra, the industry hopes to start crushing by December 7. “About 110 of the 160 mills have already started and we expect others to start over the next few days,” said M.G. Joshi, Managing Director of National Federation of Co-operative Sugar Factories.

The mills in Maharashtra have suggested making payment of Rs 2,200 per tonne in first instalment and Rs 450 later by the end of the season. However, the proposal has been rejected by farmers body Swabhimani Shetkari Sanghatan, led by parliamentarian Raju Shetty from Hatkanangle, who has demanded Rs 2,650 as first instalment.

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