By bailing out the UPA Government on FDI in multi-brand retail, the Samajwadi Party has apparently alienated the State’s influential trading community. To contain the political damage, it is now courting a numerically more significant section of voters in Uttar Pradesh — cane farmers.

On Friday, the Akhilesh Yadav administration increased the State advised price (SAP) of sugarcane for the ongoing 2012-13 crushing season by a hefty Rs 40 a quintal. Growers supplying ‘early’ cane varieties would be paid Rs 290 a quintal, against Rs 250 for the 2011-12 season. The SAP for ‘normal’ and ‘rejected’ cane has been raised from Rs 240 and Rs 235 to Rs 280 and Rs 275, respectively.

Sugar mills in Uttar Pradesh would end up paying Rs 40 more than their counterparts in Punjab and Haryana as a result of the SP’s political compulsions of having to make up for its vote on FDI.

Uttar Pradesh is the country’s largest sugarcane grower. While last year, the Mayawati Government had announced the SAP on November 8, Akhilesh Yadav’s administration had not till now fixed the price, leading to criticism by farmers’ organisations.

Distress sale

Many growers were said to be resorting to distress sale of cane to gur and khandsari units at Rs 200-205 a quintal because of the delay in announcement of SAP. They are also in a hurry to vacate the fields for planting wheat.

The SP seems set to seek political gains from the announcement. The deputy leader of SP in Lok Sabha, Shailendra Kumar, said the Centre should learn from the Uttar Pradesh Government. “The Centre is busy bringing Walmart in the name of saving farmers. But what farmers need is more money for their produce,” Kumar told Business Line.

According to a UP Government release, the latest decision will enable Rs 21,500 crore to be paid for farmers’ crop, Rs 3,300 crore more than what they got during the 2011-12 season.

The sugar mills’ ability to pay the new prices, however, remains to be seen. In the event of their not being able to, it would lead to cane arrears, thereby offsetting whatever political advantage the SP may try to seek from today’s announcement.

(This article was published on December 7, 2012)
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