Sugarcane dues: UP Govt waives interest to be paid by mills, farmers to move court, hold panchayat

Congress vice-president Rahul Gandhi too on Tuesday promised to raise the issue in the next session of the Parliament.

Written by Manish Sahu | Lucknow | Updated: October 7, 2016 12:34 pm

A DAY after the state government waived off interest to be paid by sugar mill owners on delayed payment to farmers for the 2014-15 crushing season, farmer leaders announced that they would hold a panchayat in Lucknow on October 14 and challenge the state government’s decision in the court.

Congress vice-president Rahul Gandhi too on Tuesday promised to raise the issue in the next session of the Parliament. Addressing a khaat sabha in Shamli district, he said: “Farmers are sitting on hunger strike in UP, but your government sold off sugarcane mills… and those that remained did not make timely payments… I will raise

the issue of sugarcane farmers and their pain in the Parliament.”

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On October 3, while waiving off the interest to be paid by mill owners, the government had claimed this was being done to ensure that mills continued to function, and long term interest of farmers are protected. It had cited Section 17 of the Uttar Pradesh Sugarcane (regulation of supply and purchase) Act-1953, which states that a defaulter, exceeding 15 days from the date of deliver, would have to pay interest to farmers.

“But the cane commissioner may direct… with the approval of the state government… that no interest shall be paid or be paid at such reduced rate as he may fix,” it adds.

When contacted, Bhartiya Kisan Union leader Rakesh Tikait said, “Though there is such a provision, it is unethical. Year after year, how can the state waive off the interest due to farmers? Just for 2014-15 crushing season, the interest due is about Rs 700 crore.”

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A farmer leader from Pilibhit, V M Singh, said he will move court. “There is no logic behind the government saying that this is being done for good of the farmers. Farmers are paying interest on loans they had taken from the cooperatives, but the government has waived off interest to be paid by sugarmill owners, who are just 35 to 40 in number,” he added.

When asked, Additional Commissioner (Sugarcane) V K Shukla said: “The decision has been taken as per the Act. Payment to farmers is a continuous process… if more sugar mills stop operation, it would affect future payments too.

“Thus, when the dues became very high due to a downfall in the market a few years ago, the interest was waived off to ensure the continuity of the mills as well as the payments to farmers.”

“The interest on the dues, which have been waived off for 2014-15, will amount to around Rs 680 crore,” he added.

Source said while around Rs 1,500-crore dues have to be paid to farmers by the mills for the previous crushing season, Rs 54 crore has to be paid for the year before.

Deepak Guptara, secretary of Uttar Pradesh Millers Association, said: “During 2014-15, there was an unprecedented drop in sugar prices… Grants were given by the state and Centre, but still, it was not enough to meet the losses. We had no other option but to urge the government to waive off the interest.”

He added that in the last few years, around 12 to 13 mills have been shut down, and bigger units are on way to close their businesses.

“Sugar is one of the biggest industries of UP. We contribute 11 per cent to the state GDP. To maintain the relationship between the farmers and mills, mills should at least remain alive, and this would ensure that,” said Guptara. According to official records, around 44 lakh families are dependent on the sugarcane crop in UP.