Sugarcane dues: Supreme Court seeks reply from govt, sugar mills on timely payment plea

The Supreme Court on Wednesday sought response from the Centre, various state governments and sugar mills, including Bajaj Hindustan Sugar and Indian Sugarmills Association, on a petition seeking creation of a mechanism to ensure timely payment of dues to sugarcane producers and release of some ad hoc payments to the sugarcane growers against their outstanding dues.

A Bench led by Chief Justice NV Ramana issued notices to the Centre and 11 sugarcane growing state governments and sugar mills – Bajaj Hindustan Sugar, Indian Sugarmills Association, Cane Agro Energy (India) and Indian Sucrose – on a petition by six farmers from Maharashtra, including a former Parliamentarian Raju Anna Shetti, alleging that there is a vicious cycle under which sugar mills are declared sick and dues payable to farmers accumulate into thousand of crores. As per the government records, the farmers claimed, that sugar mills owe Rs 18,000 to farmers as on January 1, 2021. These 11 states – Uttar Pradesh, Maharashtra, Punjab, Uttarakhand, Haryana, Gujarat, Bihar, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu – produce bulk of the sugarcane in the country.

The petition sought direction to the Centre and state governments to file affidavits setting out the details of the amounts due, the amounts paid and arrears by the sugar mills to the sugarcane grower or their cooperatives for sale of their cane along with interest thereon at 15% on year-wise from 2018 to 2020.

It also posted the matter for further hearing after three weeks time.

Senior counsel Anand Grover, appearing for the petitioners, argued that currently the issue is not before any high court, and it will be in the best interest of the farmers to pass an order that will be applicable throughout the country. He urged the SC to direct the governments to release some ad hoc payments to the sugarcane growers against their outstanding dues.

While seeking a direction to the government to attach sugar stocks lying with the mills and sell and distribute the proceeds to the sugarcane farmers, the petitioners alleged that non-payment of dues is a violation of Sugar (Control) Order, 1966, which stipulates that the payment to sugarcane suppliers, shall be made at the earliest within 14 days from the date of supply. The Essential Commodities Act 1955 also envisages that a “fair and remunerative price” must be paid to the producers, they added.

It sought a mechanism by which the price of sugarcane production is paid to farmers as per law in order to avoid the accumulation of such dues and to prevent farmers from vicious cycle when a sugar mill is declared sick and their dues of sugarcane produce remained unpaid.

As of April 8, 2020, the sugar mills had purchased sugarcane worth Rs 28,000 crore, but paid only Rs 15,430 crore, they added.

The petition stated that as per the data accessed by FE as on August 21, 2020, 119 sugar mills have just paid 70% of their 2019-20 cane dues to farmers and around Rs 11,000 crore dues are pending. Some of the private mills have paid less than 50% and are the usual defaulters, it added. While the Simbhaoli group has paid 24% and owes Rs 590 crore, the Modi group has paid 27% of dues and has Rs 568 crore pending, it said, adding that the Bajaj Group being one of the largest sugar producers having 14 sugar mills in UP, has paid only 39% of its total dues and around Rs 3,200 crore is yet to be paid.