Farmers demand 25% hike in UP sugarcane price

In backdrop of the 2016-17 sugarcane crushing season merely a few weeks away, Uttar Pradesh farmers are demanding at least 25 percent increase in state cane price over steep hike in farm input costs.

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 farmers’ households in UP engaged in cane farming.

The existing UP cane price of Rs 280 per quintal (common variety) has not been revised in the last four years. It was last hiked in 2012-13 crushing season from Rs 240 per quintal to Rs 280 per quintal.

Besides, the farmers are also demanding that the sugar mills be directed to pay the cane price in lump sum as against the provision of paying it in installments. The part payment facility was introduced by the Akhilesh Yadav government to support the sector, when it was passing through rough times brought about by falling sugar prices and glut in the international sugar market.

Currently, UP cane department has been holding cane reservation meetings for the different regions. This is prelude to reserving cane acreage to individual mills for crushing and producing sugar.

In these meetings, the farmers’ representatives are demanding cane price to at least Rs 350 per quintal for the coming season with some seeking much higher price of Rs 500 per quintal.

These meetings are scheduled to be over by the end of this month. Later, the cane commissioner would forward his recommendations pertaining to cane price to the high level committee headed by the chief secretary.

The state cane price known as State Advised Price (SAP) is finally announced by the state cabinet, once the chief secretary forwards his recommendations.

With elections due in early 2017, the state government is likely to keep farmers in good humour by increasing the cane price this year.

UP and Maharashtra are India’s top two sugarcane and sugar producers and contribute 50 percent to the country’s annual production.

The private mills dominate the 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, the private mills are beset with arrears of about Rs 1,500 crore pertaining to 2015-16 season with the bulk due on units controlled by Modi, Mawana, Simbhaoli, Rana and Yadu Groups. They collectively account for around 20 mills and are likely to carry forward arrears of almost Rs 1,200 crore to next season.

Over the past months, the state government had registered police cases against the defaulting mills and issued recovery certificates.

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

UP sugar sector table

Crushing season

Operating mills

Sugar production

(Million Tonnes)

Value of sugarcane purchased by mills

State cane price

(common variety)

2011-12

122

7.00

Rs 18,200 crore

Rs 240/quintal

2012-13

121

7.40

Rs 22,463 crore

Rs 280/quintal

2013-14

119

6.47

Rs 19,387 crore

Rs 280/quintal

2014-15

118

7.10

Rs 20,641 crore

Rs 280/quintal

2015-16

117

6.85

Rs 18,000 crore

Rs 280/quintal

 


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