UP government is likely to retain the last season’s State Advisory Price (SAP) of sugarcane for the current season 2018-19 and the cane price will remain unchanged. The SAP for the common variety of cane in UP, the country’s top sugar producer, stays at Rs 315 a quintal. Sugarcane farmers in UP had demanded Rs 400 a qtl, pointing to rise in input costs, such as diesel, labourers’ wages, fertilisers and so on.
A senior official of the Cane department said that the matter had been sent to the government for approval and as soon as they get the approval the order for SAP would be issued immediately.
The sugar industry predominantly in the private sector, on the other hand, have reiterated their inability to pay even the existing cane price level of Rs 315 per quintal (common variety) fixed last year for 2017-18 season. The farmers and their organisations raised the demand for hike in the SAP.
UP Sugar Mills’ Association has challenged the SAP by the state government. The UPSMA has said there is no justification of SAP in view of the existence of a centrally-announced Fair and Remunerative Price (FRP) for the sugarcane. The High Court bench, hearing the petition, said: “We would like to see the criteria/basis adopted by the state government for fixing the SAP for the last crushing season and also like to know as to what criteria/basis is proposed to be adopted this year for the fixation of such prices.”
UPSMA submitted that there was no logic behind the SAP and that it was fixed arbitrarily. The SAP was fixed arbitrarily because last year, the FRP for cane was Rs 255 per quintal and SAP fixed by the state was Rs 315 per quintal, as such there is a difference of Rs 60 per quintal.
The bench asked the state to furnish details of cane-price fixation and whether the relevant information of the association and others had been duly considered while arriving at the SAP. It also sought to know if the sugar floor price of Rs 29 per kg as declared by the Centre under the Essential Commodities Act had been factored in the final state cane price. The bench had posted the matter for hearing on December 10 and had, in the meantime, not restricted the Yogi Adityanath government from fixing SAP for the current crushing season 2018-19.
Sugar companies have for several years been asking that the government-set price for cane be linked to the retail sugar price. The UP government has not taken a stand on this although it had earlier said a committee would study the subject.
In the 2017-18 crushing season, UP’s sugar output was a little more than 1.2 crore MT. A global glut in sugar and falling prices in the home market led to payment dues of Rs 5,000 crore . Despite the arrears, the area under cane has been rising. The 2018-19 area is estimated at 26 lakh hectares, up by 18 per cent from the 22 lakh hectares of 2017-18. This is partly because despite payment delay, cane farmers see the SAP mechanism as a better bet than alternative crops like paddy and wheat.
