A tough choice for Mulayam on sugar price

Even as over 65 sugar mills have started cane crushing and almost all the 119 sugar mills in UP are likely to start production by the end of the month, the state government is procrastinating on the announcement of the state advised price (SAP) of sugarcane for the current cane season 2006-07.

The Centre has announced the statutory minimum price (SMP) for 2006-07 at Rs 80.25 per quintal on the basis of 9 per cent recovery of sugar. The SMP in 2005-06 was Rs 70.50 per quintal.

Persistent pressure from the powerful lobby of private sugar mills against a hike in the SAP due to slump in the price of sugar, coupled with the interests of the farmers in an election year, has tied the hands of the government.

"If you cannot reduce the SAP, at least don't increase it," said a senior functionary of the prominent group in the sugar industry.

"We understand the pressure of the farmers on the government, in an election year at that, but some solution has to be worked out because the industry is in no position to bear any hike in the price of the raw material," he added.

Cane department sources say they have recommended a hike in the SAP, which will be announced by the chief minister.

"No politician can afford to antagonise farmers in an election year and the SAP may be enhanced by Rs 8-10 per quintal for the early variety of cane,'' said an official of the cane department.

The SAP announced by the UP government in 2005-06 was Rs 120 per quintal for the early variety and Rs 112 per quintal for the unapproved varieties.

During 2005-06, private sugar mills had paid an additional Rs 15 per quintal to farmers in the Meerut and Saharanpur divisions.

Sources said the issue of SAP was before the cabinet. The cabinet has authorised Chief Minister Mulayam Singh Yadav to take a decision on this issue, which is likely to be announced by Yadav in the next sitting of the assembly on November 22.