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Sugar impasse breaks

Lucknow, Dec. 1: The sugarcane crisis in Uttar Pradesh came to an end today with mill owners agreeing to pay the state-fixed price of Rs 280 per quintal, with some conditions, while assuring that they will start crushing soon.

“The private sugar mills have accepted to pay Rs 280 per quintal to the farmers in two instalments and will start crushing in all the mills within three to four days,” Uttar Pradesh chief secretary Jawed Usmani said.

According to Usmani, in a letter to the state government today, private mills have said they will pay Rs 260 per quintal to the farmers immediately during cane purchase and the remaining Rs 20 before the end of the crushing season by April next year.

The government has also agreed to bear the commission to be paid to the sugarcane societies. In addition, it has waived the entry tax and purchase tax, as announced earlier.

Uttar Pradesh has more than 150 sugarcane societies with farmers as members. The societies are engaged in development activities. In addition to paying the farmers, the miller also pays a commission to the societies.

“We have accepted to pay Rs 6.20 per quintal as commission to the cane societies which was to be paid by the mills,” Usmani said. The savings to the mills on this count are expected to be about Rs 500 crore.

“The sugar industry of Uttar Pradesh, at the initiative of the chief minister and in the larger interest of farmers, announced the commencement of crushing operations for season 2013-14, despite operations being unviable at the current cane prices,” Deepak Guptara, general-secretary of the Uttar Pradesh Sugar Mills Association, said in a release this evening.

The stalemate was triggered by the Uttar Pradesh government’s decision to keep the minimum support price for sugarcane unchanged at Rs 280 a quintal for 2013-14, despite demands for a lower price of Rs 225 per quintal by the cash-starved millers. The price tussle saw mill owners refusing to start crushing, stoking protests by farmers.

The state government initiated legal action against mill owners to put pressure on the industry.

A release from the state government, however, today said it had suspended all legal action against the mills, including recovery certificates issued against nine private mills yesterday.

The state government has also assured mill owners that it will set up a committee to work out a viable cane price formula for “long-term viability of the industry”.

“The Uttar Pradesh industry will look forward to a long-term transparent mechanism of cane pricing based on sugar price realisation,” Guptara said.

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