Uttar Pradesh sugar season half-way down, 31 sugar mills yet to open accounts

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09 February 2021, New Delhi, IN: According to data accessed by FE, while the state’s average payment is 46%, as many as 31 sugar mills have not even started the payment process this season.

The sugar crushing season in the country’s largest cane growing state of Uttar Pradesh has crossed the half-way mark and the 120 sugar mills in the state have piled up arrears worth Rs 7,879 crore, as on February 2. The dues in the corresponding period last year stood at Rs 5,948 crore.

According to data accessed by FE, while the state’s average payment is 46%, as many as 31 sugar mills have not even started the payment process this season. Of these 31 mills, 11 mills are of the cooperative sector, 10 mills are of Bajaj Hindusthan, three of Simbhaoli Sugars, 2 mills each of Modi Sugars and Yadu group and one each of Shamli, Gadora and Captainganj.

Of the 14 sugar mills operated by the Bajaj group, 10 mills have not even opened their accounts while the remaining four have made minuscule payments. The group’s average payment is 0.08%. The Simbhaoli, Modi and Yadu groups too, have made 0% payments yet. However, on the other hand, others have cleared a substantial amount of their dues. The DSCL group, which operates four mills, has a payment percentage of 90%, while Balrampur Chini’s 10 sugar mills have paid 86% of its dues. Dwarikesh Sugar and Dalmia too, have cleared 83% and 81% of their dues, while Triveni and Birla Sugars have cleared 76% and 71% of their dues respectively.

Not only the bigger groups, some individual mills too, have outperformed, with Parsendi, in Bahraich having cleared 105% of its dues, Tikaula paying farmers almost 80% of their cane dues, Biswan, in Sitapur clearing 77% of the payments and Daurala and Pilibhit clearing 75% and 73% respectively.

“Every year, it is the same story. A handful of defaulter mills bring down all the good work done by the progressive mills. And what is worrisome for the sector is the fact that the mismanagement of the few defaulters is always overlooked by the state government. No action is taken against them, which acts as a dampener for those who work hard to keep their books clean,” said a mill owner requesting anonymity.

What is interesting is that the 24 cooperative mills in the state have paid only 11% of their dues. While the total cane dues of these 24 mills stand at Rs 1,006 crore, they have managed to pay only Rs 121 crore so far.

“Most of the cooperative mills incur losses every year and the state government is forced to spend crores on their maintenance and settling the farmers’ cane dues. Many of these are old and loss-making and face the problem of overstaffing, thereby bleeding the state exchequer,” said official requesting anonymity.

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