KARACHI, Sept 15: Sugar mills have failed to make payment of Rs870 million to cane growers despite expiry of second deadline of September 10, which was extended by Ministry of Agriculture after consultation with growers and the Pakistan Sugar Mills Association (PSMA).

Sindh Sugarcane Commissioner Nazeer Hassan Jamali talking to Dawn on Monday disclosed that the final list of major defaulting mills had been issued which included Sakrand (Rs240 million), Al-Noor (Rs50m), Dewan Thatta (Rs220m), Al Asif (Rs80m), Shah Murad (Rs30m), Bawany, Ghotki, Larh, Mirza, Pangrio, Ranipur, Sakrand (Rs240m), and Army Welfare etc.

He said that three mills namely Degree, Kiran and Najma claimed that they had made payments but “we have not received any official statements from these mills”.

Sources in the cane commissioner office said that out of total 20 defaulters, 10 mills - Al Abbas, Sindh Abadgar, Faran, Mehran, Habib, Naudero, Khairpur, Matiari, Sanghar and Tharparker – had made full payment against their outstanding cane dues.

The commissioner had written to mills to send intimation of the payment if they had made any by Sept 10.

He however said that legal proceedings would be initiated against the defaulting mills once it was ensured that no payment intimation was in the pipeline.

Under the Sindh Sugar Factory Act the defaulters could be sentenced to two-year in jail with fines up to Rs100,000 or both. Under the law mills owners are required to pay cane dues to the growers within 15 days of the purchase of the commodity. They are bound under the law to send a payment statement to the cane commissioner every 15 days during the crushing season.

The first deadline for payment of cane dues was set for August 30 to clear total dues of Rs2.6 billion.

A meeting held under the chair of Sindh secretary agriculture had also decided that those mill owners who could not clear dues by the deadline would have to pay 18 per cent interest on the balance amount.

However in another meeting held on September 1 at the secretary’s office it was decided to give mills 10 days grace period after which the PSMA would itself act against its members for non-payment of dues.

PSMA Sindh Zone Chairman Shuneed Qureshi told Dawn on Monday that the mills had paid record payment of Rs60 billion to the growers due to bumper sugarcane crop last year. “The balance amount, which is only 1.5 per cent of the total outstanding dues, is delayed owing to clearance of accounts”.

He disclosed that some mills had advanced loan to the growers to help them to buy fertilisers at high rates. The loans had been adjusted against their sugarcane dues.

The delay in payment to cane growers by mills is set to result in 40 per cent less sugarcane production this year.

Secretary Agriculture Subhago Khan Jatoi had confirmed this week that the sugarcane crop would be dropped by 30 per cent because many growers had switched over to sunflower cultivation, which is also a cash crop and requires less water, due to non-payment of dues by the mills.