November 8 (Friday) is considered crucial for the country’s sugar industry.

About one lakh sugarcane growers will gather that day at Jaysingpur in Kolhapur district, the sugar bowl of Maharashtra, to decide on the right price they should get for their cane produced for the 2013-14 season that began on October 1.

On the same day, some 1,000 miles away in Lucknow, the Cane Commissioner will chair the first meeting on cane price fixation with stakeholders of Uttar Pradesh sugar sector, including the farmers and millers. Subsequently, based on the outcome, the UP Chief Secretary is expected to decide and announce the State Advised Price at a later date.

While these meetings may try to provide some clarity on the vexed issue of cane pricing, it is almost certain that crushing operations for the season are likely to be delayed in Maharashtra and UP, say industry sources. Maharashtra and UP account for close to two-thirds of the sugar produced in the country.

In the run-up to the 2013-14 crushing season, farmers in UP have been seeking a higher price of Rs 320 a quintal over last year’s Rs 280, citing high input costs. At the same time, millers have so far expressed their inability to pay not more than Rs 240, citing higher production costs due to high cane costs and a bearish trend in sugar prices.

Millers, who have been demanding that cane price should be linked to the product price in line with the Rangarajan Committee recommendations on sugar de-control, have asked the UP Government to spell out its stand on cane pricing for the season before announcing their crushing dates.

More prices

After removing controls on sale of sugar, the Centre last year had left it to the States to initiate reforms on the cane side – especially pricing. While Karnataka has set up a separate board to decide on cane pricing, others are yet to act. Meanwhile, Haryana has already announced a SAP of Rs 301 a quintal, an increase of Rs 25 over last year.

“There should definitely be an increase in cane price this year,” said Sudhir Panwar of Kisan Jagriti Manch, citing the rise in production costs on costlier fertilisers, labour and other inputs including diesel. Quoting reports of the Shahjanpur-based UP Sugarcane Research Centre, Panwar said the production costs have increased to Rs 251 a quintal against last year’s Rs 228.

Raju Shetty, MP from Hathkangale and leader of the Swabhimani Shetkari Sangathan, demanded that farmers should get more for their produce than last year. As a first instalment, farmers in Maharashtra had last year received Rs 2,500 a quintal, exclusive of harvesting and transportation charges.

Trade lobby

While suspecting foul play by a section of the millers, Shetty blamed the trade lobby for the recent sugar price crash in Maharashtra, where ex-factory prices touched a low of Rs 2,600 on higher sales by mills. Shetty said farmers had turned vigilant and were not allowing shipments of sugar from co-operative mills sold at less than Rs 2,900.

It has not been an easy task for Karnataka, the first State to set up a board to decide on the cane pricing for the season. Farmers in the State have demanded that the price be linked to the recovery – the quantity of sugar produced from the cane crushed.

“We have sought Rs 280 for a basic recovery of 9.5 per cent as an advance payment, while millers are willing to pay Rs 245 for the same,” said Kurubur Shantkumar, Convenor, All India Sugarcane Growers Association.

As the issue remains unresolved, the Karnataka Chief Minister Siddaramaiah is expected to intervene and make an announcement on Tuesday. In fact, a section of farmers mainly in North Karnataka have decided to launch agitation from Tuesday over the delay in price announcement. Growers say the cane crushing in northern Karnataka has seen a delay of about a fortnight when compared to last year. In neighbouring Tamil Nadu also, the pricing is yet to be resolved. A meeting of cane growers and industry will be held on Saturday.

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