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Delay in UP cane price stokes distress sales

Source : BUSINESS_STANDARD
Last Updated: Wed, Nov 21, 2012 19:41 hrs

The state government’s delay in announcing its binding floor price for sugarcane purchases by mills from farmers, the State Advised Price (SAP), has stoked distress selling, as many small growers have to empty their fields at this time to sow wheat.

The SAP is traditionally set high, distinctly more than the Centre’s own Fair and Remunerative Price. Last year, the Uttar Pradesh government (the then Mayawati administration) announced the SAP on November 8, raising it over the previous year by Rs 40 to 250/quintal for the early variety and by Rs 35 to 240/qtl for the common variety which accounts for 60-70 per cent of total output.

However, the Akhilesh Yadav government is yet to announce this year’s SAP, leaving many farmers with little option than to sell to non-mill crushers, including the hand-operated ‘kolhus’, at much lower rates.

“The delay in SAP and onset of the crushing season is adversely affecting farmers, especially small and marginal ones. The festival and field preparation for wheat has compelled them to sell cane at Rs 185-220/qtl,” Kisan Jagriti Manch president Sudhir Panwar told Business Standard.

It was expected the government would announce the SAP after yesterday’s cabinet meeting but it came out that the chief minister had been authorised to decide the price. It is to be announced ‘soon’. The state assembly session begins on Friday.

“Ideally, the SAP should be announced in October and mills should start functioning from October 15. Sadly, the farmers are now hard-pressed to sell cane to crushers and kolhu units,” Kisan Mazdoor Sangathan Convenor V M Singh said, putting the prices paid by crushers/kolhus at Rs 150-170/qtl. Adding: “The crushers were paying better prices about a month back but now seeing the panic among farmers, they have reduced the prices.”

Earlier, the sugar industry and farmers’ representatives had met government officials to put forth their views on the cane price. While farmers demanded Rs 300-350/qtl, the industry had urged retaining the SAP at last year’s level, saying sugar prices were low.

Meanwhile, 10-12 mills in western UP have started crushing and more would join as the days advance. “The starting of crushing without an SAP may be a strategy of the government to pressurise mills to accept it when announced, as mills would not afford closure of their units once started,” said Panwar.
 

LOSING SWEETNESS
Crushing 
season
Acreage
In mn ha
Sugarcane
production
In mn tonnes
Cane crushed
by sugar mills
In mn tonnes
Sugar
production
In mn tonnes
SAP
Rs/qtl
2010-11 2.10 120.00 64.30 5.88 210
2011-12 2.25 133.57 76.86 6.96 250
2012-13 (estimated) 2.42 143.00 83.00 7.58

Awaited




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