Punjab: Cane crushing to begin in 2 months, but sugar mills yet to pay farmers over Rs 300-cr in dues

This year, the mills have sold the molasses, one of the byproducts of cane, at one of the highest rates of Rs 850-900 per quintal and earned huge profits. However, they are still dragging their feet on making full payments to the farmers.

Sugarcane crushing season will start in the coming two months, but farmers of the state are still waiting for their pending payment of over Rs 300 crore for the last crushing season. This year, the mills have sold the molasses, one of the byproducts of cane, at one of the highest rates of Rs 850-900 per quintal and earned huge profits. However, they are still dragging their feet on making full payments to the farmers.

As per the law, the payment should be released within 14 days of cane’s delivery to the mills.

Molasses is used either in distilleries or in cattle feed making industry. The rate of molasses used to remain between Rs 350-550 per quintal. Even the rate of sugar remains good between Rs 3,500-4,000 per quintal.

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Data sourced from the state cane department revealed that of the total pending dues of Rs 332 crore, Rs 127 crore and Rs 205 crore are to be paid by co-operative sugar mills and private sugar mills, respectively.

In the last season, 530 lakh quintals of cane was crushed including 379 lakh by private mills and 151 lakh by cooperative mills. The total payable amount towards farmers was Rs 1,645 crore.

The payments are due because most of the sugar mills of Punjab have pleaded that they are not able to pay the State Agreed Price (SAP) – Rs 310 per quintal cane – set by a group of experts from Punjab Agriculture University (PAU), Ludhiana, and the state agriculture department, and wanted to go with the Fair Remunerative Price (FRP) – Rs 275 per quintal – fixed by the Government of India (GOI).

For the coming season, the central government has fixed Rs 285 FRP per quintal while SAP will remain the same.

Agriculture experts said that SAP is fixed after taking everything in account and farmers deserve this price very well.

“The mill owners are not even giving the FRP set by the centre and paying Rs. 230 to 240 per quintal only and keeping the rest amount with them because of which the pend ency remains for year long,” said a senior officer in the department, adding that the private mill owners are earning good amount from the four by-products of the cane apart from the sugar but not ready to make full payment of the cane growers.

Apart from sugar, the mills are getting byproducts like molasses, bagasse and pressed-mud from sugar cane and some mills have even set up power co-generation plants and distilleries and earning huge profits.

Now, the Government of India has allowed to set up ethanol plants and a couple of mills have already applied for it. Cane juice and molasses can be utilised for making ethanol which is used in petrol and diesel for blending purposes.

There are only a few private mills including Dasuya and Amloh which have made the full payment to farmers.

There are a total of 16 sugar mills in Punjab, including seven private and nine state-owned cooperative mills and the average sugar recovery rate is 9.72 per cent, which means 9.72 kg sugar is recovered from per quintal cane and Punjab is trying to take it to the 12 per cent as Bhogpur-based cooperative mill is taking 11 per cent recovery. Good cane varieties and conducive weather can help in taking this recovery.

More than 70 per cent cane is crushed by private millers.

Punjab Cane Commissioner Gurvinder Singh told The Indian Express that they have been making all efforts to make payments of farmers as soon as possible and Rs 4-5 crore are being released into the accounts of farmers every day so that the dues can be cleared in a couple of weeks.

“We have also issued recovery notices to the mills and if they delay, we will recovery the dues as per law,” he said.

Baldev Singh Sirsa, a farmer leader, said that if the government does not clear pending dues in the next 10-15 days, they will organise big dharnas across the state.