Abinash Verma, director general of the Indian Sugar Mills Association fears that the arrests will affect functioning of the mills ahead of the crushing season. However, he expects the situation to calm down going forward as the sugar industry will collapse if the stalemate continues.
Also read: UP sugar crisis: Govt mulls linking cane with sugar prices
Below is the edited transcript of his interview to CNBC-TV18.
Q: Can you run us through what exactly has happened? How many people have been detained? We understand that the industry fears more officials are likely to be detained in future as well?
A: On Friday, three or four very senior officials in the Bijnor district were called and without giving them any kind of reason they were detained till 12:00 am at the police station. These are very senior officials. Some of them are unit heads, some general managers and all.
There is a general fear psychosis running in the district and the neighbouring districts of Uttar Pradesh that such kind of coercive action may actually go ahead and happen in the other sugar mills.
Senior people en-mass have resigned. I believe about 25-30 people very senior people in the Bijnor district of sugar mills they have resigned, which is creating a lot of problems there as most of these were actually maintaining the mills which are going to start in the next month or so. It is going to affect the maintenance of the factories as well as delay the crushing.
Q: What is really happening from a larger perspective? Is this a complete breakdown of negotiations of talks with the government then in lieu of what ha happened?
A: I do not believe that is the correct position to take because we had a very detailed meeting on October 22. We had a meeting with the honorable chief ministers and there we had the chief secretary, principal secretary.
We submitted our problems before them and they submitted their issues and we thought that we have kind of conveyed the real problems before them.
The CM and almost all the political parties and senior government officials understand the problems of the sugar industry. The cane pricing policy of Uttar Pradesh will see some rationalization in the next one month or so. So, this one of incident happening in Bijnor was a real surprise coming just after three days after the meeting with the chief minister.
I believe things would calm down now.
Q: So, your end you are hopeful of a solution over the cane pricing issue over the next one month or so?
A: I am very hopeful of that because without that kind of a solution I don't see the sugar industry able to run in the next season. The banks have refused giving us the loans unless the linkage formula between the cane price and sugar price comes up.
If the coercive action and high handedness of the states continue like this, I don't think the banks would come forward and give the loans.
If the sugar mills don't start and the cane farmers don't find buyers for the sugarcane and that they have to burn their sugar cane in the fields.
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