The sugar industry in Uttar Pradesh is jittery over the “coercive” action being initiated by the State Government against some mills in Bijnor district over the delay in cane payment to farmers.

“On Friday, three to four officials of sugar factories in Bijnor district were detained over the delay in cane payment to farmers and were subsequently released. This has triggered a kind of fear psychosis among the officials of sugar factories in the region triggering a spate of resignations at these units,” said Abinash Verma, Director-General of the Indian Sugar Mills Association.

Also, the Bijnor district authorities have sealed the godowns of companies such as Dwarikesh Sugars, Bajaj Hindusthan Ltd and Dhampur Sugars, Verma said. Stocks in these godowns were pledged to various banks and this is likely to compound the problems of millers.

However, V.M.Singh, Convenor of Rashtriya Kisan Mazdoor Sangh, termed the district authorities’ action against the millers as “half-hearted”, while stating that the State Government was not serious in resolving the issue.

“Eid has come and gone and Diwali is coming, but farmers are yet to get their dues for the cane sold last year,” Singh said. Millers owe about Rs 2,400 crore to farmers in Uttar Pradesh alone.

Further, Singh demanded that the Uttar Pradesh Government declare a price of Rs 310-320 a quintal for 2013-14 as support price for cane, citing the increase of Rs 25 per quintal announced by Haryana at Rs 301 a quintal.

However, millers claim that the sugarcane price fixed by Uttar Pradesh has increased by about 70 per cent from Rs 165 a quintal in 2009-10 to Rs 280 in 2012-13, while sugar prices have increased by only 6 per cent during the period. Uttar Pradesh millers, expressing their inability to pay beyond Rs 240 a quintal, said that high cane costs and low sugar prices had resulted in accumulation of losses. Last year, the Mayawati Government had fixed the State advised price at Rs 280 a quintal, while ex-factory sugar prices was hovering between Rs 29-31 a kg, forcing millers to incur a loss of Rs 4-5 for every kg of sugar produced.

Millers also claimed that bankers had been refusing to extend finance as the product price was not linked to the cane price and that factories were yet to clear last year’s cane arrears of Rs 2,400 crore.

“The situation is bad in Uttar Pradesh. Instead of resorting to this unwanted coercive action, the Government should find a solution that will benefit both the millers and farmers,” Verma said.

Sugar production in 2012-13 stood at 25.14 million tonnes (mt), while consumption was estimated at 22.8 mt. The industry is starting the new crushing season with an opening balance of 8.5 mt.

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