UP hikes sugarcane price by Rs 25/quintal for 2016-17 crushing season

Parubai Govind Pawar, a 55-year-old female worker cuts sugarcane in a field.
The Uttar Pradesh government on Friday hiked the state sugarcane price by Rs 25 per quintal or a little over 9 per cent to Rs 305 per quintal for the ongoing 2016-17 crushing season.

The existing UP cane State Advised Price (SAP) of Rs 280 per quintal for common variety, that forms the bulk of cane produced, had not been revised for the last three years. The previous SAP hike was effected in 2012-13 from Rs 240 per quintal to Rs 280 per quintal.

While farmers had been demanding increase to Rs 350 per quintal for selling cane to sugar mills over steep rise in farm input costs, it was expected the state government would announce at least a token hike to keep the farmers in good humour in the election year. The decision was taken at the cabinet meeting chaired by Chief Minister Akhilesh Yadav in Lucknow.

Meanwhile, the Cabinet has also decided that the mills have to settle cane dues in single installment unlike previous years. The farmers had been demanding that mills pay cane price in lump sum as against the provision of installments.

The part payment facility was introduced by the Akhilesh government to support the sugar sector, when it was passing through rough times brought about by falling sugar prices, glut in the international sugar market and arrears.

Sugarcane is a major cash crop in UP and accounts for roughly Rs 30,000 crore worth of direct economy. There are over 4 million rural households in UP engaged in cane farming.

UP and Maharashtra are India’s top sugarcane and sugar producers and contribute 50 per cent to the country’s annual production. The private mills dominate UP sugar sector with 92 of the total 117 mills.

The cooperative sector comprises 24 mills, while UP State Sugarcane Corporation Limited (UPPSCL) controls one mill. At present, private mills are still beset with arrears of over Rs 1,000 crore pertaining to 2015-16 season.

For 2016-17, UP government has estimated cane acreage to increase marginally to 20.54 lakh hectares (LH) from 20.52 LH during 2015-16. The sugar production in the state is expected to be at par with the last year, when the state had clocked output of a little over 68.55 lakh tonnes. 

Meanwhile, about 60 sugar mills have started their crushing operations in UP and roughly 2 lakh tonnes of the sweetener produced so far.

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