Giving details, Bhoosreddy said mills will distribute sugar to only willing cane farmers and it would be subject to sale quota allotted for the month to the mill concerned by the Government of India.

With farmers’ cane dues rising to over R12,500 crore and sugar production hitting the 110 lakh-tonne mark in Uttar Pradesh, the Yogi Adityanath government has come up with a unique experiment of allowing sugar mills to give sugar to willing cane farmers in lieu of their balance cane price for the current season. The farmers can take one quintal sugar per month till June.

Talking to FE, principal secretary, excise and sugar industry and cane development, Sanjay R Bhoosreddy said this arrangement has been made in face of the lockdown. “The reason behind this experiment is that both the farmers and sugar mills are stressed and their interests have to be looked into. Institutional buying of sugar has stagnated due to the lockdown and OMCs are also not able to lift ethanol, as the sale of petrol has been heavily impacted. This has hit the mills’ liquidity in a big way and they are not able to clear the cane dues to the farmers. At the same time, farmers have been facing problems of liquidity too, and have been demanding that if not cash, they be paid in kind. This effort is to help both keep afloat in these stressful times,” he said, adding that both the industry and the farmers are on board on this.

As per the government’s decision, those farmers who are willing to take sugar in lieu of their cane price dues would be allowed to take one quintal sugar per month for three months till June at the lowest price of the day, plus GST, and the amount would be settled from their overall dues. If no sugar has been sold on that day, the previous day’s lowest price would be applicable. The willing farmers would have to use his own transport to carry the sugar and they will not get any additional transportation cost for it. The GST would be deposited by the mills to the state treasury.

Giving details, Bhoosreddy said mills will distribute sugar to only willing cane farmers and it would be subject to sale quota allotted for the month to the mill concerned by the Government of India. “The cane farmers will have to lift sugar from sugar mill’s godown by their own means and no transport subsidy will be given for it. By doing so, the farmers can save around Rs 1,300 to Rs 1,400 per quintal as the price at the mill godown would be around Rs 31.50/kg, while if they buy in the open market, sugar price would be around Rs 42 per kg. So, in three months it would amount to more than Rs 4,000 for three quintals,” he said.

“There are almost 50 lakh farmers who supply cane in UP. If all agree to lift the sugar for three months, this will take care of 1.5 crore quintals of sugar stock. Mills would be happy as it would save them the holding and storage cost of this much sugar,” he said.