Even as the the Uttar Pradesh government is yet to announce the State Advised Price (SAP) for sugarcane, farmers have already started distress sale of the cash crop to local gur units, ahead of the forthcoming crushing season.
These units are paying around Rs 190/quintal to farmers, who need money for the festival season and want their fields empty for the rabi crop, mainly wheat.
Meanwhile, at least one sugar mill has started crushing in western UP at Modinagar on the condition to pay farmers at the rate of SAP, whenever announced.
By the end of this month, around 15 units are likely to start crushing, which would go full steam by the third week of November.
“At present, there is overcapacity in the sugar sector of UP, which restrict sugar mills to operate at sub-optimum level, while the crushing season has also got shortened,” Kisan Jagriti Manch president Sudhir Panwar told Business Standard.
He claimed that almost 30-35 per cent of sugarcane is diverted off sugar mills to local khandsari and gur units due to distress selling by farmers every year. “There are issues such as proper weighing and low prices in these units operating in the unorganised sector locally,” he added.
“The local gur units are getting cane supply from farmers, while khandsari units are still not functional,” Gur, Khandsari and Grain Merchant Association member Narendra Kumar said.
Meanwhile, the high-level committee headed by the state chief secretary met here on Friday over SAP and to forward its recommendations to the state government for approval by the cabinet. Sources said SAP could be announced this week itself, although last year it was announced in the first week of November.
Experts from UP Council for Sugarcane Research (UPCSR), Shanjahanpur; Indian Institute of Sugarcane Research, Lucknow; As per Sardar Vallabhbhai Patel University of Agriculture and Technology, Meerut; and National Institute of Sugar, Kanpur had presented their calculation of input cost and prospective sugar scenario at the meeting.
It was indicated that sugarcane input cost on account of labour, fertiliser and diesel as per UPCSR had risen to Rs 187/quintal vis-à-vis Rs 139 last year, an increase of 34.5 per cent.
The sugar industry maintained it was not in a position to sustain even last year price levels. For 2010-11 crushing season, SAP stood at Rs 205-210 and the farmers want it raised to Rs 300-350/quintal.
In 2011-12, UP sugarcane acreage is estimated to rise 7.2 per cent to 2.252 million hectares (MH) compared to 2.101 MH in 2010-11.
Sugar is the largest organised industrial sector in the state comprising 125 odd sugar mills and about 4 million farmers associated with the crop. For 2010-11, total sugarcane dues were in the region of Rs 13,000 crore, excluding the local economy of gur and khandsari units.
