ISMA rejects UP govt offer of panel on cane price

The deadlock between the Uttar Pradesh government and sugar mills over cane prices continues with the Indian Sugar Manufacturers Association (ISMA) rejecting the government's offer to set up a panel to look into linking cane and sugar prices.

Also read: What Rangarajan Committee on sugar price decontrol recommended

Abinash Verma, managing director, Indian Sugar Mills Association, said there was no need for the panel, or even a state-advised price for cane if the Rangarajan Committee recommendations were accepted.

ISMA has reiterated its stand that sugar mills were not in a position to  pay more than Rs 225 per quintal, Rs 55 less than the state-advised price of Rs 280.

The UP government too is adamant that it cannot accept the cane price proposed by sugar mills.

Verma said sugar mills already owe Rs 2000 crore in arrears to sugar cane farmers, and this could increase to Rs 15,000 crore by March.

He said banks were refusing loans because of the mills' weak financial position.

Earlier in the day, the UP government offered also to waive entry tax which would help sugar mills save around Rs 220 crore. The government also offered a subsidised interest scheme which would help sugar mills save Rs 190 crore.

The government feels these measures are good enough for sugar mills to avoid losses, and that there are no further room for negotiations.

 It has warned of penalties for sugar mills which would not start crushing operations by December 4.

More to come.

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