UP sugar industry pays 50 per cent of cane dues

NEW DELHI: The Uttar Pradesh sugar industry, which was on the verge of a shutdown owing to high cane arrears, has paid 50 per cent of its cane dues in just one month of its operations.

Out of the total dues of Rs 1,711 crore, the sugar mills have paid half the amount of around Rs 850 crore for the current sugar season. The state’s sugar industry was not able to pay the cane farmers due to high cane costs and declining sugar prices. This led to cane arrears mounting to Rs 2,400 crore at the start of the new sugar season in October 2013, the highest in the country. Making matters worse, the UP state government didn’t decrease the cane price and kept it as same as last season at Rs 280 per quintal. Meanwhile, the sugar price in the state plummeted from Rs 32 per kg to Rs 29 per kg.

Only after the industry declared a shutdown did the state government and Centre announce a series of sops to help it pay the cane dues. The Cabinet Committee on Economic Affairs (CCEA) last month approved the guidelines for financial assistance of Rs 6,600 crore to the sugar industry for payment of cane arrears.

Industry officials said that government’s scheme for extending financial assistance to sugar undertakings would help in faster clearance of cane price arrears. Before that, the state government had also given tax waivers to the struggling local sugar industry, claiming a total benefit of Rs 219 crore.