The Uttar Pradesh cabinet on Thursday approved ₹20/quintal hike in the State Advised Price (SAP) of sugarcane for the ongoing season, which will be mandatory for the sugar mills to pay as per the Supreme Court decision.

After this announcement, mills will have to pay ₹370 for early variety and ₹360 per quintal for common variety, the State’s Sugar Industry and Cane Development Minister Laxmi Narayan Chaudhary told reporters in Lucknow. The previous rate was ₹350 per quintal for early variety and ₹340 per quintal for common variety. Chaudhary said over the past six years, the Adityanath government had increased cane prices by ₹55 per quintal.

Last revision

The last price revision was made in 2021 when the SAP of sugarcane was raised by ₹25 per quintal, ahead of the 2022 State Assembly elections. In Uttar Pradesh, 42 lakh families and 45 lakh labourers are engaged in sugarcane cultivation, Chaudhary said.

While the Centre fixes the fair and remunerative price (FRP) of sugarcane, based the recommendation of the Commission for Agricultural Costs and Prices, (CACP), the SAP is announced by some States considering their own cost of production and this separate system has been upheld by the Supreme Court when mills had challenged such jurisdiction.

In the last sugarcane price policy report, the CACP had said States such as Haryana, Punjab, Uttarakhand and Uttar Pradesh have been declaring SAP for sugarcane which is higher than FRP and the SAP is not determined scientifically. The CACP reiterated its earlier recommendation that State governments should refrain from announcing SAP.

BKU terms it ‘insufficient’

“In case the State Government wants to continue with SAP, the difference between SAP and FRP should be directly paid to cane farmers by the concerned State Government through Direct Benefit Transfer (DBT) and not force the mills to bear the additional burden of SAP,” it had said.

Bhartiya Kisan Union (BKU) has termed the cane price hike insufficient. BKU president Naresh Tikait appealed to the State government to reconsider its decision saying the hike is insufficient as the cost of production has increased. He sought SAP to be fixed at ₹450 per quintal.

On the other hand, some sugar mills owners said it is natural for the government to announce a hike this time before the next Lok Sabha poll. They hoped that the Centre should announce a similar hike for the minimum selling price of sugar, which is now at ₹31/kg, to boost the market sentiments.