1 December 2016: With the hike in State Advisory Price (SAP) of cane by Rs25 per quintal for the 2016-17 crushing season, over Rs22,500 crores is likely to flow into the rural economy.
This is the value of the sugarcane to be purchased by 117 sugar mills from the farmers in UP and would be 25 per cent more than the value of cane procured by these mills in the last cane crushing season 2015-16.
As per estimates, mills are likely to crush nearly 75 million tonnes (mt) and produce more than 7.60 mt of sugar in the current season, against 6.85 mt of sugar in 2015-16.
On November 18, the state government had raised the SAP of cane from Rs280 per quintal for common variety to Rs305. The SAP for the early and unapproved varieties of sugarcane was also increased to Rs315 and Rs300 per quintal respectively. The common cane variety accounts for the bulk of cane produced in UP.
The SAP had not been revised in the last three years and the last hike was in 2012-13 which put cane price at Rs240 per quintal to Rs280 per quintal.
Evan as over 100 sugar mills have commenced cane crushing , there is no relief to cane growers as mills still owe over Rscrores to them for the last season. About 27 private sugar mills in UP have arrears of about Rs1,300 crore for the last crushing season. Cane Commissioner has already issued notices and recovery certificates against the defaulting ’s mills.
However, this year to provide relief to farmers and eliminate the problem of delayed payments by the mills, the state government has directed the mills to settle cane dues in a single payment unlike in instalments effected during previous years.
The part payment facility was to support the sugar sector, when it was passing through rough patch due to falling sugar prices, glut in international market and arrears.
According to UP Sugar Mills Association (UPSMA) – the body of private sugar mills, 92 private mills have paid Rs 15,014.98 crore or 93.26 per cent of the total dues and still Rs 1084.54 crore were pending of the farmers of the previous 2015-16 season. The private mills were also yet to pay Rs 46 crore of the 2014-15 seasons.
In the last season, 117 mills, including one of UP State Sugar Corporation, 24 of the Co-operative sectors, had crushed 6,456 lakh quintals of cane and produced 6.85 Million MT of sugar at 10.62 per cent recovery rate.
Of the main defaulter among the private sugar mills are Modi group with outstanding amount of Rs 335.40 crores followed by Simbhaoli of Rs 207.12 crores, Mawana group of Rs 161.18 crores and the Bajaj Group of Rs 131.19 crores.
Sugarcane is a major cash crop in UP and accounts for roughly Rs 30,000 crore worth of business for the economy. There are over 4 million rural households in UP engaged in cane farming.
There are 92 private sugar mills, 24 run by the Co-operative sector, while UP State Sugarcane Corporation is left with only one sugar mill.