UP sugar mills in huge arrears to sugarcane farmers: Kunwar Danish Ali

27 May 2021

In a letter written to Prime Minister Narendra Modi, the Amroha MP Kunwar Danish Ali from the Bahujan Samaj Party (BSP) has highlighted the issue of the sugar mills of Uttar Pradesh (UP) being in huge arrears to the sugarcane farmers. What is more worrying is that the sugar mills are not paying the farmers in time despite the export earnings of sugar and those in the domestic market.

The letter begins by detailing how UP enjoys the pride of place on the sugar map of India. Uttar Pradesh has been the largest sugar-producing state in the country for the second consecutive year, in which more than 40 lakh sugarcane farmers of this state contribute.  Last year, UP sugar mills were major participants as about 60 lakh tonnes of sugar was exported from the country and the sugar production here was almost twice that of Maharashtra.  It is estimated, as per the letter, that around the same amount of sugar will be exported in the current year as well.

Ali then points to the irony of the situation. “Ironically, even after such a huge economic contribution of the sugarcane farmers of Uttar Pradesh, they themselves are going through a huge economic crisis.  Despite the steep rising cost of sugarcane production, the state government has not increased any sugarcane State Advisory Price (SAP) for three consecutive crushing seasons, while electricity, fertilizers, pesticides, diesel and wages have all gone up substantially. There has been a huge reduction in the earnings of sugarcane farmers.”

The letter adds: “The farmer who produces sugarcane at the cost of a year of hard work and supplies sugarcane to sugar mills on time, is never being paid on time.” It then goes on to provide the data regarding arrears and delays. “Contrary to all claims of the Uttar Pradesh government, (in) the last crushing season (2019-20) which ended in April-May 2020, the state sugar mills were able to pay lakhs of farmers by January, 2021 and some by February, 2021.  The current crushing season (2020-21), which is almost over, has more than 11,000 crore rupees on the sugar mills till May 12, 2021,” says the letter.

According to the state government's own documents, as of May 12, the total sugarcane payment for the state's sugar mills was Rs 32,348.66 crores.  Even in the calculation of statutory arrears 14 days after sugarcane supply, the figure was Rs 31,487.75 crore.  Out of this, only Rs 19,615.05 crores has been paid by the said sugar mills till May 12.  Thus, the sugar mills are in arrears of Rs 11,872.70 crores.  According to the state government, till May 12, 62.29 percent of the total balance has been paid, while 37.71 percent is still due.

Ali also contrasts the situation in UP to that in Maharashtra. “While the sugar production of sugar mills in Maharashtra was half last year and lower than Uttar Pradesh in the current season, but by April 30, the sugar mills paid 92.4 percent.” This amount was “1,000 crores more than the payment made by Uttar Pradesh till May 12.”

The letter laments that the government’s moves have not benefited the farmers. It says that “despite the export earnings of sugar and the domestic market, the sugar mills are not paying the farmers in time.” The central government had claimed to provide benefits to the industry such as making ethanol directly from sugarcane, subsidizing interest in setting up distilleries, so that farmers would get their payments on time.  Sugar mills are also earning from electricity generation. Subsidies have been given for exports in the last year and also in the current year. But no benefit has been made to the farmers till now.  “This can happen only when your central government and your party's government in the state do not pressurize the sugar mills for payment and do not care about the interests of the farmers,” Ali says in the letter without mincing words.

Ali cites in his letter the case of Amroha, his own parliamentary constituency, where sugar mills owe the farmers Rs 594.97 crore in all even after the crushing season is over. Of this, Simbhaoli sugar mills owe Rs 374.97 crores.

“In the Corona curfew, farmers are facing severe economic crisis due to non-payment,” says the letter. It puts the blame for this plight of the farmers squarely on the government and urges it to be sensitive.  “Sugar mills also run distilleries and are making a lot of money by producing alcohol and ethanol.  Keeping in mind the total earnings of such mills, the government should take strict action against them in the event of delay in cane payment.  Small farmers are most affected by the delay in sugarcane payment during the pandemic, as many of these farmers have less than one lakh rupees annual payment of sugarcane. When the sugarcane payment of these farmers is not done in time, then you can understand how their economic status and social status will be.”

Ali then draws attention in his letter to the promise made by the Prime Minister during Uttar Pradesh's Vidhan Sabha elections in 2017 that “sugarcane farmers will be paid within 14 days.” The government has failed to live up to this promise, the letter says.

Concluding the letter, Ali strongly urges the Prime Minister “to take cognitive steps on this very important issue and take action as soon as possible so that farmers can get their sugarcane dues in time because farmers’ upliftment is directly linked to the progress of our country.”