Agri Business

Sugar as payment: UP’s offer leaves a bitter tasteamong farmers

TV Jayan New Delhi | Updated on May 01, 2020 Published on April 29, 2020

Farmers offered a quintal of sugar a month as part payment of arrears that touched ₹16,000 crore

The Uttar Pradesh government’s proposal to sell a quintal of sugar for three months towards part payment of sugarcane dues has attracted widespread criticism from farmers in the State.

Last week, the State government proposed that interested UP sugarcane farmers, arrears due to whom have crossed ₹12,000 crore, could take a sugar bag of 100 kg at mill gate price and the payment towards this could be adjusted against the arrears that sugar mills owe them.

Bumper production

As per the latest projections, UP may have a bumper sugar production of around 110 lakh tonnes this sugar season.

According to Sanjay R Bhoosreddy, Principal Secretary for excise, sugar industry and cane development, the decision was taken in view of the liquidity crunch faced by the mills in the wake of the Covid-19 crisis and the problems faced by farmers.

“What does the government want us to do with 300 kg of sugar (over three months)? A farmer can’t consume that much during this period. If the government is thinking that he can sell it and take the money, when the mills themselves are not able to sell, how do you expect the farmers to peddle it? On top of it, the government wants to earn GST from such sales,” said Sardar VM Singh, President of Rashtriya Kisan Mazdoor Sanghtan, and President of All India Kisan Sangarsh Coordination Committee.

“Most of the mills in UP have made payments for crushing of 15 to 30 days so far. As a result, the arrears to be paid to sugarcane farmers have ballooned. Bhoosreddy came up with the idea of giving sugar to farmers toward part payment of cane arrears. Most sugarcane farmers in the State are against such a move,” said Jitendra Kumar Hudda, a sugarcane farmer and a local leader from western UP.

“If the government thinks that the farmers can keep the sugar till June and sell it in the market when there is a demand, why can’t the mills themselves sell then and pay the farmers?” he asked.


Meanwhile, an official with Indian Sugar Mills Association said the move is not without some merits. First of all, farmers would be able to get sugar at much cheaper rate than the market price, which he could sell or give the extra sugar that he has to the extended family as well as friends in the village.

Secondly, there is a serious cash flow issue with the sugar mills currently. And they are not sure when will they get out of this crisis. As a result, this could be a win-win situation for both, the official said.

Published on April 29, 2020

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