The sugarcane pricing policy followed by Uttar Pradesh government has not been the best for farmers in the state, say sugar producers.
“As compared to Maharashtra, which holds the number one status in sugar production, there is wider range of fluctuation in cane payments in UP, which is resulting in arrears,” ISMA Director General Abinash Verma told PTI.
He said while cane price payments have varied in the range of 65 per cent to 86 per cent of the sugar price realised by the mills in Maharashtra, the fluctuations have been wider in Uttar Pradesh.
“It has fluctuated in a wider range of 48 per cent to 96 per cent of sugar price realisation in the case of UP cane farmers,” he said.
Verma said average payments over eight years works out to 75 per and 72 per cent for Maharashtra and UP, respectively.
“In other words though on an average UP farmers did receive 72 per cent of sugar price realised in the last eight years, they suffered major fluctuations in their returns as also the burden of delayed payments with arrears building up to very high levels in some years,” he said.
“It is therefore important to note from all aspects that the current cane pricing policy followed by the state has not been the best for the farmers,” he added.
ISMA is one the oldest industrial associations in the country and its members account for about half of country’s sugar output.
Verma said the policy has also not helped in improving the cane varieties, cane yields or sugar recovery. “If the current pricing policy is not benefiting the farmers or the millers then the time has come to review the current policy.”
The ISMA DG said the state advisory price (SAP) announced has increased from Rs 165 per quintal in 2009-10 to Rs 280 per quintal in 2012-13. “This means an increase of Rs 115 per quintal at the rate of Rs 40 per quintal per annum and in turn it has increased the cost of production from Rs 24 per kilogram to Rs 35 per kilogram in this period,” he said.
To promote the industry, which is facing tough times in the state, recommendations of Rangarajan Committee for revenue sharing should be adopted, the ISMA Director General said.
“It recommended that cane price be fixed at 75 per cent of the sugar price realisation ex-mill, which will be subject to a minimum guaranteed cane price at the level of FRP (Fair and Remunerative Price),” he said.
The DG said it would be simple to understand for all stakeholders and guarantee a stable return to both the farmers and the millers.
“Moreover, the farmers and millers become partners to the business of sugar making where the former are guaranteed a share of better realisation if the sugar price improves even during the off season,” he said.
Verma said ISMA was taking up the issue with the state government and recently a delegation met Chief Secretary of UP in this regard.