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Meerut: At a time when pending dues of sugarcane farmers are mounting with each passing day, the UP power corporation owes Rs 846 crore to 46 sugar mills in the state. Power generation is a by-product of sugar manufacturing and after consuming electricity generated from burning of cane waste, sugar mills sell the surplus to the government.
According to an estimate, sugar mills currently owe Rs 6,770.54 crore to cane farmers and these companies are not being able to make payments because of evaporation of cash reserves due to glut in the market after a bumper crop.
At present, only 71% of the dues have been paid to the farmers despite the rule that a farmer must be paid within 14 days of the receipt of crop by the mill.
According to a mill manager who did not wish to be quoted, “The government is applying too much pressure on private sugar mills to clear farmers’ dues despite the fact that private mills have a better record of paying as compared to cooperative mills. As of now, private sugar mills have paid 71% of the due amount. To make matters worse, the power corporation hasn’t cleared our dues.”
If one goes by the data provided by Uttar Pradesh Sugar Mills Association (UPSMA), a large chunk of pending electricity dues are from western UP. For instance, the power corporation owes Simbhaoli sugar mill in Hapur Rs 41 crore, while Khatauli sugar mill has to be paid Rs 33.77 crore. Similarly, Rajpura sugar mill in Badaun is yet to recieve Rs 33.44 crore.
According to an UPSMA official, “Mills are already bleeding financially. The price of sugar has plummeted to Rs 3,220 per quintal while the average cost of producing the same is Rs 3,450. So, mills are already incurring a loss of Rs 230 per quintal.”
Although the government on Tuesday scrapped export duty on raw and refined sugar to boost shipments and to stabilize prices, but for sugar mills it’s a race against time as farmer bodies have already started protesting against the delay in payments.