Buoyed by a 2014 policy that encouraged cogeneration plants, the mills had undertaken either expansion or setting up of green field cogeneration plants, only to be deemed ineligible by the end of 2018. In fact, a mill that had received central assistance has now been asked to refund the amount or face criminal action.
In Uttar Pradesh, mills are blaming low sugar prices for the inability to pay SAP to farmers. At ex-factory rates of Rs 3,100-3,150 and average recovery of 10.9 per cent, mills can realise Rs 338-343 from every quintal of cane that is crushed.
For ethanol derived from B heavy or B grade molasses, the price has been raised from Rs 47.49 to Rs 52.43 for every litre. The ex-mill price for ethanol produced from 100 per cent sugarcane juice, so that no sugar is produced from it, is Rs. 59.19 per litre.
While mills are required, by law, to pay the SAP amount within 14 days of cane purchase, the Malakpur factory has till date disbursed a mere Rs 32 crore. That amounts to less than 7 per cent of what is due to its 34,000-odd farmers.
Distilleries in Punjab have the capacity on paper to consume 25 lakh quintals of molasses. In reality, though, they use up only 17 lakh quintals. Mills manage to sell around 5 lakh quintals to other states, while the rest is carried over.