With the logjam in Uttar Pradesh over higher sugarcane price continuing, the Centre on Thursday asked the state government to settle the issues with sugar industry at the earliest so that mills start crushing operations in the current season that started from October.

Assuring Centre’s full assistance in solving the UP sugar crisis, Union Food Minister K V Thomas asked sugar mills and farmers not to “precipitate” the crisis.

He said domestic supply is comfortable on the back of huge opening stocks of nearly 9 million tonnes.

Cash-starved UP private millers have decided not to start operation in 2013-14 marketing year (October-September) saying they cannot pay more than Rs 225 per quintal to farmers as against the state advised price (SAP) of Rs 280 a quintal announced by the state government.

“Our request is the state government should take initiative so that crushing starts. Farmers and millers’ issues should be settled. All problems should be discussed and settled. Whatever assistance is needed from the government of India, we will do it within our norms,” Mr. Thomas told reporters.

“We request farmers and millers make things smooth. The state government should take initiative to settle the issue earliest. We appeal to farmers and mills not to precipitate the issue,” he added.

The Minister informed that 101 out of 170 mills have started functioning in Maharashtra. “Out of 122 mills in UP, 50 mills have started. More mills will start operations”.

However, it may be noted that most of the private sugar mills have shut crushing operations.

On Wednesday, crucial talks between UP government and mill owners to break the logjam over cane crushing operations failed, with millers refusing to run their plants at current high cane price.

Asked about the Centre’s plan to give financial package to sugar industry, Mr. Thomas said: “We had discussion with the Finance Minister on Thursday. We also had discussion with Dr C Rangarajan on the sugar issue. An informal group of ministers will look into the financial package. Whatever possible within our norms, we will definitely support”.

The informal group of ministers, headed by Agriculture Minister Sharad Pawar, would take a decision on all sugar related issues including financial package. “As soon as the Agriculture Minister comes, a meeting will be held to decide on the issue,” he added.

Mr. Thomas said the Rangarajan panel had made eight suggestions to decontrol the sugar sector. The Centre has implemented three of them and the rest needs to be done by the state governments.

“We have taken a strong decision and removed 3 major controls. States have to seriously look into the rest of the recommendations. Whatever assistance needed, we will provide,” Mr. Thomas added.

The Centre has given freedom to mills to sell sugar in the open market and has also removed the obligation of supplying the sweetener to the government for PDS purpose. The rest of the controls were left to the state governments to do away with.