UP Announces Rs 500cr To 24 Sugar Mills To Settle Cane Arrears

Aid will be given to 24 state-run cooperative mills as loan, arrears will be settled via direct transfers into farmers' bank accounts. The state mills had paid 100 per cent of their cane arrears to farmers totalling Rs 33,048 crore for the last 2018-19 crushing season

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Source: Sugar Times| 24 August, 2020 | 11:47 AM

The Uttar Pradesh government today announced a financial package of Rs 500 crore for the cooperative sector sugar mills to settle cane arrears for the 2019-20 crushing season.

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The financial aid would be given to 24 state run cooperative mills as loan, while the arrears would be settled by transferring the money directly into the bank accounts of the beneficiary farmers”, according to UP additional chief secretary, sugar industry and sugarcane, Sanjay Bhoosreddy.

He further added that the amount of assistance will be directly transferred to bank accounts of farmers, as write-offs of their cane price dues.

“An amount of Rs 500 crore has been granted to sugar mills in the form of soft loans, which is based on the respective mills’ payment-making capacity. The remaining cane price arrears owed by cooperative mills will be around 10-15% of the total value of sugarcane procured, which is around Rs 800 crore,” said Bhoosreddy.

He added he was regularly monitoring the status of payments being made by sugar mills to cane growers, towards their outstanding cane price dues

Recently, UP sugarcane minister Suresh Rana had urged chief minister Yogi Adityanath for a financial package for the cooperative mills in this regard.

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“The state government is sensitive towards the sugarcane farmers’ issues and as such Rs 500 crore have been released for the cooperative mills for prompt payment,” Bhoosreddy said.

Meanwhile, the total cane payments to farmers by the private and public sector mills in UP during the three and half years of the Yogi Adityanath government is more than Rs 1.03 trillion. This also includes cane outstanding on the mills for the previous crushing seasons. Adityanath had become the chief minister of UP on March 19, 2017.

In the last three years, the state of UP clocked record levels of more than 326 million tonnes (MT) of sugarcane crushing and 36.5 MT of sugar production by the public and private sector mills. In the 2019-20 crushing season, cane crushing of 111.8 MT of cane and sugar production of 12.6 MT was registered, which is highest ever in the state.

The state mills had paid 100 per cent of their cane arrears to farmers totalling Rs 33,048 crore for the last 2018-19 crushing season. “The state department of Sugar Industry and Cane Development is committed to protecting the interests of the cane farmers,” Bhoosreddy had recently said.

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However, cane arrears pertaining to the recent 2019-20 crushing season, especially on the private sector mills, are still pending. Of the total 118 mills in UP, nearly 94 are owned and operated by the private sector.

During the period of covid-19 lockdown, he said, when most industries in UP and in other states were closed, then only the UP sugar mills had continued their crushing operations.

“In spite of the sugar sale remaining negligible during the lockdown, cane payments worth Rs 5,954 crore were made to farmers. In this payment, the decision to tag the sale price of ethanol and sanitiser for cane price payment was important,” he had said.