Given word to farmers, govt now tells mills to pay up

Ruchika M. Khanna

Tribune News Service

Chandigarh, September 2

The state government has asked private sugar mills to clear their pending dues of Rs209 crore to the cane growers as soon as possible. With the issue of non-payment of dues snowballing into a major movement, the government, having cleared dues of its seven cooperative sugar mills, is now asking private mills to follow the suit.

The move came following a massive protest staged by farmer unions in Jalandhar today. The government has reportedly assured the farmers that all their dues would be cleared shortly.

In a meeting held with representatives of the private sugar mills here till late this evening, the committee formed by Chief Minister Parkash Singh Badal has assured the private mills that the government will help them secure soft loan from banks. Of Rs125 crore loan that Punjab will get from the Rs6,000 crore package for sugar mills announced by the Centre, the nine private sugar mills will get Rs88 crore as soft loan, with a moratorium on payment and an interest waiver for one year.

Top government officials have confirmed that they have also assured the private mill owners that they will help them secure a soft loan for the remaining Rs121 crore from banks. The process to start securing the loan will begin soon, said a senior officer. This will help the mills clear their dues.

Sources in Sugarfed say since the prices of sugar fell in the global market and the price of cane remained much higher, the mills have been unable to clear the dues of growers. The sugar prices fell to Rs2,400 per quintal while the state advised price for procuring cane was Rs295 per quintal. As a result, the cost of sugar produced in Punjab went as high as Rs35 per kg or Rs3,500 per quintal.

Though the issue had been simmering for quite some time, with the Congress first staging dharna, followed by Bhartiya Kisan Union (Rajewal) and now other farmer organisations taking the agitation to the streets, the government failed to act on time and contain the situation.

Initially, the government tried to ensure that cheaper sugar from outside Punjab (mainly from UP, where cane was procured at just Rs240 per quintal) by imposing an 11 per cent tax, the protectionist measure came too late. Even when it came, it was mired in controversy. The ordinance was issued without a schedule being attached to it and without notifying the ordinance under the Governor’s seal and signature. This led to sugar traders and bulk sugar consumers rushing to the court and getting relief.

Top functionaries in the Agriculture Department say they could anticipate the problem and had recommended the Chief Minister to impose a 15 per cent tax on sugar coming to Punjab from outside the state. However, the tax was imposed only in June this year. By this time, the sugar traders had piled up their stocks and there remain few takers for the more expensive sugar produced in Punjab.