The Hindu Business Line : UP hikes cane support price

The Uttar Pradesh Government has declared a modest Rs 10 per quintal increase in the State Advised Price (SAP) for sugarcane during the ongoing 2006-07 crushing season (October-September).

Sugar mills would have to pay Rs 125 per quintal for common cane and Rs 130 per quintal for early maturing varieties, besides Rs 122.5 per quintal for non-standard varieties during the current season, the Chief Minister, Mr Mulayam Singh Yadav announced in the Vidhan Sabha at Lucknow on Friday.

During the 2005-06 season, the per quintal SAP was fixed at Rs 112.50 for non-standard cane, Rs 115 for normal and Rs 120 for early-maturing varieties, while these were Rs 104.50, Rs 107 and Rs 112 in 2004-05, and Rs 92.50, Rs 95 and Rs 100 in the preceding three seasons.

Modest hike

The Rs 10 per quintal higher SAP announced by UP is modest compared to the hefty Rs 17 per quintal increase (from Rs 115 to Rs 132 per quintal) resorted to by Captain Amrinder Singh's Government in Punjab, which is also slated to go for polls early next year. Moreover, considering that mills in UP last year actually ended up paying over Rs 130 per quintal to farmers last year — as against the official price of Rs 115-120 per quintal — the additional cost impact would be negligible.

The mills say they are not in a position to pay more for cane this season because ex-factory sugar realisations have dropped by roughly Rs 200 per quintal over last year. They also cite the fact that gur and khandsari units are currently paying just Rs 85-90 per quintal.

Last year, these same alternate sweetener makers were willing to procure at Rs 110-125 per quintal, compelling mills, in turn, to pay Rs 130 or more in order to prevent diversion of cane. This time, there is no such compulsion and any move to hike SAP inordinately would only result in cane arrears to farmers.

During the current season, mills in UP are expected to crush a record 760 lakh tonnes (lt) of cane and produce 73 lt of sugar. Total payments to growers are likely to cross Rs 8,700 crore.

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