UP farmers demand 25% hike in sugarcane price

Virendra Singh Rawat

Lucknow / Nov 10, 2020

Citing steep increase in farm input costs, the sugarcane farmers in Uttar Pradesh, the country’s top sugar producer, have demanded more than 25 per cent hike in cane price for the current crushing season 2020-21.

Last year, the government had kept the UP cane price, State Advised Price (SAP) unchanged at Rs 315 per quintal (100 kg) for the common variety of the cash crop. The prices for the early and rejected varieties of cane were held at Rs 325 and Rs 305 per quintal respectively.

With the crushing underway, the state has begun the process of fixing the price for the season. The committee headed by UP additional chief secretary, sugarcane, held a meeting with the representatives of farmers, sugar industry and experts, wherein the growers demanded the state government to increase the cane price to Rs 400 per quintal.

Interestingly, the Yogi Adityanath government has not increased the SAP since 2018-19 in view of the market glut and the fall in the domestic and international sugar prices.

In August 2020, the Centre had fixed the cane Fair and Remunerative Price (FRP) for 2020-21 at Rs 285 per quintal at a recovery of 10 per cent.

FRP is the minimum cane price to be paid by the sugar mills for the procurement of the crop. However, some states fix a higher floor price for sugarcane to incentivise their growers. This way, the price of Rs 400 per quintal demanded by UP farmers is more than 40 per cent marked to the FRP.

Meanwhile, the UP Sugar Mills Association (UPSMA) and the Bajaj Group have expressed their inability to pay at higher level than the current price owing to purported difficult market conditions, including low sugar selling price ceiling of Rs 31.50 per kg, projected sugar market glut etc.

The UPSMA has submitted a memorandum to the government urging the state not to effect any hike in the cane price, allowing the millers to repay farmers in three installments and facilitating early settlement of the electricity cogeneration dues.

Now, the committee will submit its report to the panel headed by the state chief secretary, which will, after due deliberations, later give its recommendation to the state cabinet.

So far, more than 50 of the total 119 UP sugar mills had started their crushing operations.

UP accounts for 40 per cent of the country’s sugar output, and the Indian Sugar Mills Association (ISMA) has projected the state’s sugar production to exceed 12.45 million tonnes (MT) in the current season, compared to 12.63 MT in 2019-20 season.

UP’s sugarcane economy is pegged at Rs 50,000 crore, comprising sugar, molasses, ethanol, power cogeneration etc. UP private sector millers, numbering 94, collectively owe farmers’ outstanding of about Rs 6,000 crore for the previous 2019-20 season.