Friday, 15 August 2014

Government warns mill-owners to pay arrears to farmer or face legal action

NEW DELHI: The government on Thursday warned defaulting sugar mills in Uttar Pradesh which have not yet paid arrears to cane farmers and asked the state government to take "tough action" including legal steps if they fail to quickly release the dues, amounting to nearly Rs 5,300 crore.

After holding a marathon meeting with the apex body of sugar mills association and top officials from UP and other states, food minister Ram Vilas Paswan said, "So far, the UP government has taken soft action against defaulting mills and the state should go tough on mills and ensure they clear the entire cane arrears in 15 days."

He said the recently announced incentives, including additional interest-free loan, hike in import duty from 15% to 40%, continuation of export subsidy and 10% ethanol blending with petrol to sugar mills, would be notified only when the millers give in writing to clear all pending amounts to farmers.

Out of total cane arrears of Rs 8,703 crore so far in the country, UP millers owe about Rs 5,304 crore. Five mills owe most of arrears in the state, Paswan said. While Bajaj Hindusthan has to pay maximum arrears of Rs 1,527 crore, Mawana Sugars Ltd owes Rs 566 crore. Modi Sugar Mills has to clear Rs 418 crore arrear while Simbhaoli and Shamli Sugar Mills have to pay Rs 273 crore and Rs 157 crore respectively to farmers. Owners of most of these mills were present at a recent conference where private millers from the state had announced to suspend cane crushing from October-November.

That apart, some mills in the state have also allegedly diverted Rs 1,668 crore taken on cash-credit from banks exclusively to make cane payments, Paswan said.

Sources said while in the meeting the issue of state government fixing higher cane price was discussed, the UP government officials said that the millers could challenge this in the court. "They said the price was fixed after taking consent of millers and it was no exorbitant," said an official, who was present in the meeting.

The state government had fixed Rs 280 per quintal that millers needed to pay against the state advised price of Rs 220. Later, the state had reduced the cane price to Rs 260 per quintal for 2013-14 season that ends next month. mills,Ram Vilas Paswan,mill-owners,farmers,export subsidy



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