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UP Govt. offers sops to sugar mills, warns of action

29-Nov-13 15:09 Hrs IST

Announcing tax breaks to end the impasse in the sugar industry, Uttar Pradesh government today warned sugar mills of legal action if they did not start operations by next week. Worried over farmer backlash over sugar mills not buying standing sugarcane crops, the UP Govt. announced waiver of entry tax and purchase tax to soften the high procurement price. The industry has shut its mills, demanding that the government cut cane price because production has become unviable due to low sugar price and high cane price.99 private mills out of the state's 122 units have refused to start sugarcane crushing from October as they found the Rs 280 per quintal price set by state government as unviable, prompting even Central Govt. to consider a financial bailout package for the industry. The sops announced after three rounds of talks with factory owners, however, came with the caveat that the price of Rs 280 per quintal to be paid to farmers was not negotiable and they will face action if they do not start operations. Prime Minister Manmohan Singh has already set up an informal group under Agriculture Minister Sharad Pawar to work out the package. Uttar Pradesh government has already booked three mill owners in the sugarcane belt of Muzaffarnagar for failing to start operations.