Ahead of the 2019 Lok Sabha elections, the Uttar Pradesh government faces the difficult task of satisfying the sugarcane farmers who are pitching for over 25 per cent hike in the State Advisory Price (SAP) of cane for the current 2018-19 crushing season.
If their demands are acceded to by the government, the sugarcane price will be Rs 400 per quintal for the 2018-19 season.
The sugar industry, which is predominantly in the private sector, on the other hand, has reiterated its inability to pay even the existing cane price of Rs 315 per quintal (common variety) fixed last year for the 2017-18 season.
The farmers and their organisations raised the demand for hike in the SAP during the meeting of the cane price fixation committee headed by the Chief Secretary. The farmers’ leaders made a strong demand for hiking cane SAP to Rs 400 per quintal on the ground of rise in prices of agricultural inputs like diesel, fertilisers, seeds, etc.
“Both the Central and the state governments have repeatedly affirmed their agenda of doubling farmers’ income and yet there has been insignificant increase in the cane price in recent years,” said representative of UP Cane Cooperative Societies, Arvind Kumar Singh, who participated in the high-level meeting.
The Centre has fixed the fair and remunerative price (FRP) of cane at Rs 275 per quintal. UP traditionally announces a much higher SAP of cane to be paid by the sugar mills.
The millers have cited glut in sugar market due to record sugar production in last season (2017-18) which has resulted in high sugarcane arrears of the last season. Currently, the state cane outstanding stands at about Rs 7,800 crore for the last season (2017-18). Around 75 private sugar mills have applied for collectively availing a Rs 4,000-crore soft loan sponsored by the Yogi Adityanath government to ease the cane arrears payment situation.
The mills maintain that the fact that the state announced the soft loan package is proof enough that the sugar sector is facing difficulties in making payments and any further hike in price will only compound the problem.
There are about 40 lakh rural households in UP directly associated with sugarcane farming with the sugar and by-products sector infusing as much as Rs 50,000 crore in rural economy annually.
In run-up to the 2019 Lok Sabha poll, the ruling Bharatiya Janata Party can ill afford to antagonise the state farmers, especially in western UP that has higher concentration of sugar mills.
So far, about a dozen sugar mills have started their crushing operations in UP, out of the total 119 units in the private and Cooperative sectors.
Minister of State for Sugarcane Development, Sugar Mills ((Independent Charge), Suresh Rana on Monday directed sugar mills to commence cane crushing by November 25 and clear the cane arrears by November 30.
The private sugar mills, as relief for the industry, have urged the state government to allow staggered payments to farmers with the first instalment being FRP of Rs 275/quintal, to prevent the prospective build-up of arrears in the current season. They have also underlined that the domestic sugar sector has already been put in the negative list by commercial banks.
This year, UP cane acreage is estimated at 26 lakh hectares, up 18 per cent from 22 lakh hectares in 2017-18 when UP had clocked sugar production of 1.2 crore metric tonnes (MT) with farmers’ payables touching Rs 35,400 crore.
