After a delay of over a month, Uttar Pradesh chief minister Akhilesh Yadav on Friday 7 December announced the much awaited State Advisory Price (SAP) of sugarcane for the current crushing season by hiking it by Rs 40 per quintal for all the three varieties of the sugarcane – early, common and unapproved.
The UP Cabinet, in its meeting on 20 November had authorised the Chief Minister to determine and announce the SAP. The CM made the announcement after 17 days. The cane crushing season in UP commences in October and sugar mills starts operation after Diwali and the SAP is traditionally announced by the end of October.
The Samajwadi Party government, while hiking the SAP, maintained parity with the hike announced by the previous Mayawati-led Bahujan Samaj Party government for the last season 2011-12. Mayawati, ahead of the UP Assembly election held in February 2012 had announced a hike of Rs 40 per quintal for all the three varieties. The announcement was made on 8 November 2011.
As per the SAP announced today, the sugarcane farmers of UP would get Rs 290 per quintal for the early variety, Rs 280 for the common variety of the sugarcane and Rs 275 per qt for the unapproved variety. The early variety fetches higher price due to high sugar recovery (up to 10 percent, i.e. 10 kg sugar is produced from 100 kg of sugarcane) and the unapproved has the lowest sugar recovery as low as 4 to 5 percent.
The government however also announced relief for the sugar mills as it hiked the cost of transportation of the sugar cane from the Rs 5.75 per qt to Rs 8.75 per qt. The sugar mills will deduct Rs 8.75 from the SAP to the farmers if they transport the sugarcane from the cane purchase centers to the mill. No deduction will be made if the farmers supply the sugarcane at the sugar factory gate.
Chief Minister Akhilesh Yadav said with the hike of Rs 40 per quintal, the farmers will get Rs 3,300 crore more against the price they received in last season 2011-12. In 2011-12, sugar mills had paid Rs 18,200 crore for the sugarcane purchased from the farmers and for the current season this is estimated to be Rs 21,500 crore.
The delay in the announcement of the SAP, was snowballing into a major political issue in UP. The opposition parties condemning the delay in announcement of the SAP, had disrupted the recently concluded winter session of the UP Assembly over the delay, accusing the government of being hand-in-glove with the sugar mill owners and hurting the interest of over 45 lakh sugarcane farmers of UP. UP has 124 sugar mills, while 23 are in cooperative sector, the rest are private.
Akhilesh Yadav government has set a sort of record in delaying the announcement of the SAP. The previous record was set by his father Mulayam Singh Yadav. The then SP regime had announced the SAP on 5 December 2005.
The SAP for sugarcane in UP had always been a bone of contention between the private sugar mills. The SAP is traditionally higher than the Fair and remunerative price (FRP) fixed by the Centre. For the current season, the Centre has fixed FRP of Rs 175 per quintal.
Meanwhile the UP sugar Mills Association (UPSMA), a body of the private sugar mills, has criticised the hike in SAP. “The massive increase of about Rs 40 per quintal of sugarcane announced by UP government today has come as a big surprise. Compared to Rs 165 per quintal of SAP in 2009-10 season, the current price of Rs 280 per quintal is an increase of 70 percent in three years. The sugar prices have gone up by just about 15 percent. The neighbouring states of Haryana and Punjab have fixed the SAP of around Rs 240 per quintal, whereas Tamil Nadu has fixed the SAP of Rs 225 per quintal only’’, said SL Gupta, Secretary of UPSMA.
Gupta added, “The massive hike in SAP is not in the interest of either the consumers or the farmers who would experience huge sugarcane price arrears.’’
Virendra Nath Bhatt is a Special Correspondent with Tehelka.