For the third year in a row, Uttar Pradesh may retain the same sugarcane price this year in a step potentially aimed at helping mills to clear the arrears to be paid to farmers. The state government is thinking of not raising the price of cane from the existing level of Rs 280 a quintal for the 2015-16 sugar season (October-September), sources said. The state has, in principle, accepted the recommendation of the Rangarajan committee that suggested sugarcane price be linked with market rate of sugar, an official said. However, the cabinet will take the final decision, which may be influenced by political compulsion, the official said. Last year, the state announced a formula under which mills were to be paid Rs 240 per quintal of cane purchased from farmers while the state government was to share the remaining Rs 40 a quintal under a plan. Mills in Uttar Pradesh, the country’s largest producer of sugarcane, were to pay about Rs 4,200 crore to farmers at the end of the last season as of September 30. The total cane purchases by mills in the state was estimated at about Rs 21,000 crore last year. Farmers are not interested in seeking a hike in the cane price as the arrears have reached a record high, said Avdhesh Mishra, president of cane committees’ association in Uttar Pradesh. “What is the point in asking for more when we are yet to get full payment for last year,” he said from Lucknow. Cane is a hardy crop and can withstand weather variation for which farmers want to stick to it despite such huge arrears, he said, adding that no other alternative crop can match it. The Samajwadi Party government last year announced a formula after mills threatened to stop crushing cane due to falling prices of sugar, claiming that their operations were becoming economically unviable. In the state, the sugar belt in the western region influences the politics of Uttar Pradesh and leaders compete with each other to champion issues related with farmers. As assembly elections in Uttar Pradesh is to be held in 2017, this year may be the last chance for chief minister Akhilesh Yadav not to announce a hike in cane price, the official said while requesting that he not be named as he was not allowed to speak before a decision is taken. Next year will be crucial for Yadav on this issue. The Centre has been asking states not to fix higher price for sugarcane than the one fixed by it. The central government announces a fair and remunerative price (FRP) for cane each year. On the other hand, states are free to fix a state advisory price that is binding on mills, as per a Supreme Court ruling. The FRP for 2015-16 has been fixed at Rs 230 a quintal, an increase of Rs 10 from a year ago. Uttar Pradesh is the second-biggest producer of sugar after Maharashtra and home to all big private mills such as Bajaj Hindusthan, Balrampur Chini Mills, Dhampur Sugar, Simbhaoli Sugar, Mawana Sugars, DCM Shriram. The share prices of some these sugar mills have dropped by up to 29 per cent since January this year. India is estimated to produce 27 million tonnes of sugar this season, which is lower than an initial estimate in July, according to Indian Sugar Mills Association. It cut the production estimates due to lower rainfall. Mills in Uttar Pradesh are likely to produce 7.5 million tonnes and 9 million tonnes in Maharashtra, ISMA said. However, the Uttar Pradesh government has estimated an output of 7.2 million tonnes for this year.