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Centre calls meeting to resolve Uttar Pradesh sugar mills issue

India TV News Desk 10 Aug 2014, 12:00:31 PM IST
India TV News Desk
New Delhi: With sugar mills in Uttar Pradesh threatening to suspend operations from the 2014-15 crushing season starting October unless the state government accedes to their demand to link the sugarcane price to the price of sugar, the Central government has called a meeting on August 14 to resolve the issue.

Asserting that the Uttar Pradesh mills have grievances with the state government and not with the Centre, Food Minister Ram Vilas Paswan said, the Centre can only do a mediator job and will see how it can arrive at a middle path that can protect the interest of both farmers and mills.

Farmers in the state are not happy with the slow payment of cane arrears, which still stand at about 7,000 crore rupees.

“The state government has the right to investigate if mills are not paying dues to growers,” Paswan said.

The UP Sugar Mills Association (UPSMA) had on August 4 given a notice to the state government threatening to suspend the operations in 2014-15.

CB Patodia, president of the UPSMA said that the due to the faulty pricing mechanism of the Uttar Pradesh government, the mills are losing around Rs.5.50 for every kilogram of sugar sold due to a hike in cane prices.

The close to 100 private sugar mills in Uttar Pradesh have been at loggerheads with the state government, which makes sugar companies pay a premium to farmers over the cane price fixed by the Centre.

While the Central government fixes a Fair and Remunerative Price (FRP) for sugarcane, state governments are free to determine the price they want sugar mills to pay to the farmers for cane.

Uttar Pradesh had fixed a cane rate in 2013-14 season which at Rs 280 per quintal is almost Rs 50 more than the Centre's fixed price for the year.