Uttar Pradesh government, which is about to hold an assembly election in six months, has launched recovery proceedings against five sugar mills that have been ‘perpetual defaulters’ in cane disbursement to sugar cane growers.
In an official statement issued on Wednesday, Sanjay R Bhoosreddy, Additional Chief Secretary, Sugar, and Cane Development, stated that ‘penal action was initiated against sugar mills that were defaulting in cane price payments because, despite several notices, these mills were negligent in payment of sugarcane farmers.
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Further he added ‘According to the provisions of Sections, 17(4) and 18(3) of the Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1953, recovery certificates (RCs) have been issued against five sugar mills for failing to clear the farmers’ dues.’
Malakpur-Baghpat (Modi Group), Gadaura-Maharajganj, Chilwaria-Bahraich (Simbhaoli Group), Itimaida-Balrampur (Bajaj Hindustan Group), and Bisauli-Badaun (Yadu Group) are among the defaulting sugar mills, he said.
Whereas the Modi Group’s Malakpur mill has an 8,000 TCD capacity, Bajaj’s Itimaida mill has a 12,000 TCD (Tons of Cane per Day) capacity, and the Yadu Group’s Bisaulo mill has a 7,000 TCD capacity. The Gadaura and Chilwaria sugar mills of Simbhaoli of Ghaziabad district can crush 4,500 tonnes and 6,000 tonnes of sugarcane per day, respectively.
As per a sugar industry source in the state, these mills will be obliged to pay an extra 10% on top of the defaulted amount.
According to Bhoosreddy, 36 of the 120 operational sugar mills in the 2020-21 crushing session paid 100% cane price for the previous crushing season, 29 paid more than 80%, and 19 mills paid more than 90%.
More mills on the list
A farmer leader, on the other hand, believes that many more mills in the state deserve equal punishment. Suresh Rana, Minister of Cane Development and Sugar Industry cited the case of three mills in Shamli district, from which he originally comes, saying these three sugar factories — Shamli (of Upper Doab Sugar Mills), Unn (of Superior Food Grains), and Thanabhawan (Of Bajaj Hindustan) — collectively paid only 46.64 percent of around ₹1,143 crore dues so far.
According to him, the sugar mills in the state crushed sugarcane worth approximately 33,000 crore during the current sugar season, but the payment received thus far has been approximately ₹25,500 crore. In other words, the cane payment of ₹7,500 crore is still outstanding. Furthermore, an interest amount of ₹3,000 crore from the current government’s tenure, as well as ₹5,000 crore from previous regimes, is still owed, according to the farmer leader.
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Furthermore, farmers earned ₹3,000 crore less from sugarcane this year because the yield was lower, while the cost of cultivation was relatively high due to higher diesel prices and a power tariff increase, he stated.