Sugarcane farmers in Uttar Pradesh witnessed a 40 per cent rise in their income at Rs 18,206 crore in the 2012 sugar season, from Rs 13,000 crore last year. This means an increase of approximately Rs 5,200 crore which would eventually result in more disposable income in the hands of agriculturists, farmers and farmhands. It would, thus, boost the rural economy in UP by creating demand for consumer goods, farm equipment/inputs and other discretionary spending.

With the crushing season already over, the 123 sugar mills had collectively paid nearly Rs 14,885 crore to farmers. The arrears of about Rs 3,320 crore are likely to be settled by July 20.

Last year, UP had hiked cane sugarcane advised price (SAP) by almost 20 per cent. The price of early variety of cane was increased by Rs 40/quintal to Rs 250/quintal, while that of common variety was hiked by Rs 35/quintal to Rs 240/quintal. SAP is the actual price paid by state mills to farmers.

Till date, the arrears on private and cooperative sugar mills stood at Rs 2,771 crore and Rs 551 crore over total dues of Rs 16,638 crore and Rs 1,568 crore respectively, implying that compared to co-operatives, private units have been better in clearing arrears.

Last year, sugar output had touched 6.96 million tonnes (mt) against 5.88 mt. All the 123 functional mills had crushed 76.74 mt of cane with the recovery percentage standing at 9.07 per cent; lower than 9.14 per cent last year.

According to the state cane department, the cane arrears of previous years have almost been settled. While total cane dues had been cleared for 2004-05 and 2005-06 crushing seasons, over 99 per cent arrears had been settled for subsequent seasons.

Sugar is the largest organised agro-based industry in UP, with an estimated 4 million farmers engaged in sugarcane farming. Other industries, such as molasses and power (cogeneration), are also supported by sugarcane, accounts for an annual economy of around Rs 30,000 crore.