Centre calls meeting to resolve UP sugar mills issue on Aug 14

New Delhi: With sugar mills in Uttar Pradesh threatening to shut down operations due to high state-set cane prices, the Centre has called a meeting on August 14 to resolve the issue. Asserting that the UP mills have grievances with the state government and not with the Centre, Food Minister Ram Vilas Paswan said: "We have called a meeting on August 14 to resolve the issue. We can only do a mediator job. We will see how we can arrive at middle path as we want to protect the interest of both farmers and mills."

Farmers in the state are not happy with the slow payment of cane arrears, which still stands at about Rs 7,000 crore. And the UP government has the right to investigate if mills are not paying dues to growers, he said. "In the meeting, we will discuss why inspite of several incentives like export subsidy and interest-free loans given to sugar mills, cane arrears are being cleared slowly." The meeting will be attended by private mills and also the state cane commissioners from Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu and Bihar.

Paswan said that cane dues have risen in Uttar Pradesh as mills in the state are forced to pay a premium over the cane price fixed by the central government. "We have fixed the cane price of Rs 210 per quintal for this year and mills have no issue paying this price. But they have issue paying the price of Rs 280 per quintal set by the UP government," he said, adding that Bihar too has fixed higher cane price of Rs 265 per quintal.

Early this week, cash-starved private UP sugar mills had threatened shutdown of their operations from the 2014-15 season starting October if the UP government does not stop raising cane prices "arbitrarily" and fails to link the rates to the amount of sugar extracted, like some states do. Their decision had come soon after the state government started initiating action against cane price defaulters. UP mills were at loggerheads with the state government last year also. They had suspended crushing operations for two months last year.