New Delhi, Aug. 14: The Centre today said incentives for sugar mills will be notified only if the mills give a written undertaking that all cane arrears will be cleared.
“We are ready to hike import duty from 15 per cent to 40 per cent, allow 10 per cent ethanol blending with petrol, give additional interest-free loans and export subsidy for raw sugar, but mills need to assure that they will clear farmers’ dues,” Union food minister Ram Vilas Paswan said after a meeting on the issue with states and industry officials.
However, he asked the Uttar Pradesh government to take “tough action” against defaulting sugar mills if they failed to clear the Rs 5,300-crore sugarcane arrears to farmers by next month.
UP is the second biggest producer of sugar in the country.
“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,” Paswan said.
Mills in the state have decided to suspend operations during the next season starting October 1, 2014, saying they are unable to pay the higher price set by the state government.
“We are taking initiatives to help end the impasse but we want mills to clear cane arrears and start cane crushing for the next sugar year,” Paswan said.
The Centre does not want to interfere in a state subject but farmers are “very unhappy” over non-payment of arrears, he added.
The minister said the undertaking from mills has been sought because UP mills have not fully cleared arrears despite the state government relaxing cane price to Rs 260 per quintal from Rs 280 for 2013-14 season that ends next month.