The Hindu Business Line : Declare SAP first before reserving cane area, say growers

NOT SO SWEET
Any move to reserve area before SAP would go against the law.
UP Govt has already formed a committee to recommend SAP for 2008-09.
Growers in a better bargaining position due to lower crop.

Harish Damodaran

New Delhi, Oct 12 In what could well create a precedent, sugarcane growers in Uttar Pradesh (UP) are demanding that the State Government declare the price payable by mills for their crop before issuing any orders ‘reserving’ cane areas for individual factories.

In the normal course, the State Cane Commissioner holds public meetings before issuing reservation orders binding growers to supply cane to particular mills for which the area has been exclusively assigned.

These meetings usually take place a couple of months before the start of the crushing season (October-September) and are held in the division headquarters concerned (Meerut, Moradabad, Saharanpur, Lucknow, and so on) in order to facilitate wider farmer participation.

But this time round, the meetings have had to be called off on account of restive growers, who have sought fixation of the State Advised Price (SAP) by the Government before any reservation orders are issued. “Why should we be asked to bind our cane without knowing what price are we going to receive? It is like being offered a job without any idea of what the salary would be like,” said Mr V.M. Singh, Convener of the Kisan Mazdoor Sangathan.

LEGAL MODALITIES

He claimed that any move to reserve cane areas before declaring the SAP would go against the law. “The Lucknow Bench of the Allahabad High Court, in its order of February 1, 1999, has clearly held that the reservation order is complementary to the cane price. This order has subsequently been upheld by the Constitution Bench of the Supreme Court in its May 5, 2004 judgment,” he noted.

The Cane Commissioner is empowered to issue reservation orders under Section 15 of the UP Sugarcane (Regulation of Supply and Purchase) Act, 1953. Once the orders are issued, the growers (or the cooperative society representing them) and the sugar mill concerned are required within 14 days to execute form ‘B’/‘C’ agreements binding the two parties to sell/purchase cane at the specified quantities and price ‘agreed’ upon.

“As far as we are concerned, the agreed price is the SAP and without its announcement, there can be no reservation order either,” Mr Singh contended. The UP Government, on its part, has already constituted a Committee to recommend the SAP to be payable by mills for the 2008-09 season.

The Committee, headed by the Chief Secretary, Mr Atul Kumar Gupta, held its first meeting on Friday to elicit the views of both the mills as well as growers’ representatives. “We want the SAP being fixed before cane area reservation to become a precedent. This will ensure that no miller will henceforth go to Court claiming that the SAP is not an agreed price since it was declared after the reservation orders were issued and executed,” Mr Singh said.

LOWER CROP

Unlike in the previous season, growers feel they are in a much better bargaining position this time due to a lower crop size as well as better sugar price realisations (not to speak of pressures of impending elections on the ruling Government).

Mills in UP are expected to produce only around 60 lakh tonnes (lt) of sugar this season, against the 73 lt in 2007-08 and the 85 lt each of the preceding two seasons. “The mills are desperate for cane this time. But if they don’t pay a good price, the farmers will simply offload all their cane to gur (jaggery) manufacturers and go ahead with planting wheat in time,” Mr Singh warned.