Indian sugar mills association

UP farmers, sugar mills split

Date:	01 Oct 2011

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News ID:	593

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Lucknow: It’s that stime of the year when sugar seems to taste bitter in Uttar Pradesh. With only a month remaining before the sugar season starts, a decision on cane pricing is pending before the Uttar Pradesh government, the country’s second largest producer of the sweetener. And with the industry and farmers’ views looking seemingly unbridgeable, the task of the sub-committee on cane pricing, headed by Cane Commissioner Kamran Rizvi, is definitely a hard one. More so this year, as the state is all set to go to the polls early next year and sugar pricing is widely seen as a ploy to woo the almost 4 million cane farmers, who form a crucial vote bank. At Friday’s meeting to discuss the state advised price (SAP) for sugarcane, the floor price paid to the sugarcane grower for his produce, before it is finally put up before the chief secretary’s committee, cultivators were of the view that the price of cane should be fixed in between R300-390 per quintal, while the industry felt that paying beyond last year’s cane price of R205 per quintal for the common variety is unaffordable for the industry, which is already reeling under extreme pressure. Shooting down the claim of the industry, the cane commissioner tried to walk the middle ground. “There is a need to close the gap and come out with a solution that is amicable to both parties,” he told the two stakeholders, adding that having diametrically divergent views would be detrimental for the sector. According to sources, a consensus is likely to be around R240 per quintal for the common variety and R250 per quintal for the early variety of cane. Expressing the views of the industry, Shyam Lal Gupta of ISMA said that the pricing for cane worked out by the CACP was R145 per quintal while the Shahjehanpur Sugarcane Research Institute worked out the cost of cultivation to be R162 per quintal. “If an average 20% profit margin is taken into account, the price of cane should be in the region of R193 per quintal. We are already paying more than that amount at R205 per quintal last year. Hence we should go by that pricing this time, too,” he stated. However, farmers’ groups immediately booed at this suggestion and stated that the average cost of cultivation, as worked out by Sardar Vallabbhai Patel University was R216 per quintal in the western part of the state. “If we go by MS Swaminathan’s report recommending a minimum 50% profit on any crop, our pricing works out to be around R325 per quintal,” said Yogesh Dahiya, a farmer leader from Saharanpur. “The cost of input has seen a 100% increase over that of last year, including labour and fertilizer cost. These factors are not taken into account while settling the cane price. Add to this the fact that the livelihood of the farmers, including the standard of living as well as the education of their children, is attached to this pricing. There is therefore need to make the pricing policy more broad-based,” he said, adding that a final price of around R250 per could be something that would work for everyone.

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