UP government seeks clarity on cane prices

The Uttar Pradesh government on Monday filed an application seeking clarification on the Supreme Court's interim sugarcane price order for 2006-07, which was delivered last month.

"It is not clear from the order whether the price of Rs 118 a quintal will apply to the quantity for which no payment was made as on the date of the order or to the entire quantity bought by a mill in 2006-07 season. Certain mills are insisting that their total sugarcane purchase should get adjusted at the price of Rs 118 a quintal," said a state government official.

In an order passed on February 27, the Supreme Court fixed the prices for the declined unsuitable variety at Rs 115 a quintal, Rs 118 a quintal for the general variety and Rs 123 a quintal for the early variety for the 2006-07 season.

While saying that as an interim arrangement, payment should be made by the mills at the above rates, the order added, "if any payment has been made towards the state advised price (SAP), the same shall be adjusted from the amounts payable on the basis of the rates indicated above."

It further said, "If any payment has been made beyond the rate fixed above, there shall not be for the present any refund."

The sugar mills in the state had crushed 89.5 million tonnes of sugarcane during the 2006-07 season to produce 8.5 million tonnes of sugar.

At the state advised price of Rs 125-130 a quintal, mills were required to pay Rs 11,010 crore to farmers for the sugarcane they purchased last season. Mills still owe about Rs 450 crore to farmers for the purchases made in 2006-07.

The Allahabad High Court, in an order on December 19 last year, has quashed the state government's 2006-07 SAP of Rs 125-130 a quintal following a writ petition filed by a number of mills, challenging the state's mechanism behind fixing the SAP.

However, following a petition by the UP government, the Supreme Court in January stayed the High Court's order. Thereafter, on February 27, it passed an interim order that declared new sugarcane price for 2006-07.