UP cane arrears balloon to over ₹12,000 crore

Almost four months into the 2020-21 crushing season, the Uttar Pradesh Government is yet to announce the state advised price (SAP) for sugarcane, while millers have so far, crushed about 40 per cent of the cane grown in the largest producing State. The delay in the SAP announcement has also surprised the industry.

Mills have so far crushed 455.4 lakh tonnes (lt) of sugarcane to produce 46.04 lt of sugar in the sugar season that began on October 1.

Mounting dues

As a result, UP sugarcane farmers — who have so far supplied sugarcane worth ₹14,000 crore to the mills in the season — received only ₹4,448 crore towards cane payment.

The payment made by the mills in the current season also includes an arrears of over ₹2,500 crore of the previous sugar season, which ended on September 30 last year.

“This was by far the historic late in announcing the SAP in any season. The record for delayed announcement of SAP was earlier held by Akhilesh Yadav who announced it on January 18, 2016 for the season 2015-16. Yogi seems to have broken that record,” said Jitender Hudda, a farmer from Shamli district in western Uttar Pradesh.

“It is already too late. This is not done. The season has started in October.

“The government seems to be worried that no increase in SAP or a small increase may further add to the anger of the farmers who are already up in arms the three farm laws. No other explanation can be given for this undue delay,” said a sugar industry source in the State, who doesn’t want to be named.

A large number of sugarcane farmers from western UP are already camping around New Delhi demanding the repeal of three farm laws.

Lower prices

The industry source, however, said some mills are making payments at the old rate as advised by the State. The problem is that the sugar prices have fallen again. “The domestic market is not showing any kind of promise.

The price is little over ₹3,100 per quintal. This is much lower than the cost of production,” he said.

Shubam Malik, a young farmer from Lank village, located 11 km from Shamli town, said he hasn’t received any payment towards cane supplied in the current season, even though he got some dues for the previous season cleared.

In the previous season, mills bought 1,118 lt of sugarcane worth ₹35,899 crore but the payment made was only ₹34,050 crore.

The balance including an interest of around ₹750 crore, came to ₹2,600 crore and was carried forward to the current season. The payment of ₹4,448 crore made thus far was partly towards the dues from the previous season.