Agri Business

Why UP govt has kept sugarcane price unchanged

TV Jayan New Delhi | Updated on February 25, 2021

Growers complain of costlier inputs, mills question the need for State support

The Uttar Pradesh government’s has decided keep the State-Advised Price (SAP) for sugarcane unchanged for the current season (October 2020-September 2019) despite significant rise in input costs. The Yogi Adityanath government decision is intriguing as the decision comes amid the ongoing farmers’protests.

The only time the State government increased the SAP was in 2017-18 when it effected a ₹10-hike to ₹315. While the regular sugarcane crop would fetch ₹315 per quintal, early variety and unsuitable variety would get ₹325 and ₹310 per quintal, respectively.

Input costs up

Farmers in western Uttar Pradesh, the major sugarcane belt, are already complaining about significant increase in input costs. “Since the last SAP increase, diesel prices have gone up by ₹18 a litre. We pay ₹1,750 for monthly electricity charges (against ₹700 earlier). So are labour charges. We also pay more for fertilisers and pesticides,” said Shubam Malik, a young farmer in Shamli district.

The cost of cultivating sugarcane in one bigha (one hectare is around 14 bighas) has gone up by nearly ₹10,000-12,000 on account of this, Malik said.

“It is not that the government is unaware of the increase in input costs. Actually speaking, it is the government which is benefiting most from this increase in input prices. Take diesel prices or electricity charges, for instance,” said Sudhir Punwar, an agricultural policy expert and former member of State Planning Commission.

According to agricultural economists at the Lucknow-based Indian Institute of Sugarcane Research, the cultivation cost in 2020-21 is around ₹298 per quintal compared to ₹280 in 2018-19. The sugarcane cultivation cost worked out by the Shahjahanpur-based UP Council of Sugarcane Research, too, is similar at ₹301 per quintal.

Industry take

Sugar industry, however, has a different take on the issue. “Why should there be an SAP in the first place? When the Central government puts its mind so much in fixing a uniform price for the crop across the country after so much of deliberation with all stakeholders, why should UP government come up with another price for sugarcane,” asked Abinash Verma, Director General of Indian Sugar Mills Association (ISMA).

“If the State government thinks that the Centre has done a bad job, it should represent it. Why doesn’t it then have higher floor prices for other crops in the State? Why only sugarcane?,” Verma wondered. The Commission for Agricultural Costs and Prices in a 2018 report said that sugarcane growers got returns that were 245 per cent higher than paddy farmers and 252 per cent more than wheat and cotton farmers.

The ISMA official agreed that the farmers should get the cane payment in time. “It is not that mills do not want to pay, most of them are suffering from major liquidity problems. That is why the payment is getting delayed,” he said.

As per the data released by the Department of Sugar Industry and Cane Development in the State, mills have released over ₹9,653 crore towards the cane payment for the current season till February 22. The department, however, does not mention what are the total dues to the farmers. “It should be upwards of ₹10,000 crore. In addition, there is pending dues of the previous year, which is over Rs 2,000 crore,” said a source.

Published on February 25, 2021

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