UP declares Rs40 hike in cane procurement price

Top sugarcane growing state Uttar Pradesh on Tuesday declared a Rs40-per quintal hike in the purchase price the normal variety of sugarcane for the 2010-11 crushing season. The price has been fixed at Rs205 per quintal. The state advised price (SAP) for the unapproved, common and early varieties has been fixed at Rs200, Rs205, and Rs210 a quintal respectively.

The union government had set the 'fair and remunerative' price for cane for 2010-11 at just over Rs139 a quintal, up Rs10 from last year. The higher price fixed by the Mayawati government is expected to quell the opposition clamour in this regard.

UP's state advised price for the common variety stood at Rs165 a quintal last year, while that of unapproved and early varieties was pegged at Rs162 and Rs170 respectively.

The SAP is expected to serve as a benchmark price against which the negotiations between farmers' groups and sugar mills, which hit an impasse last Friday, will begin.

Crushing has been delayed primarily due to the friction over cane price. It is on the basis of this price that farmers, who took a protest to New Delhi last year demanding higher prices, will negotiate their demand for the actual cane price this year. Every other development in the sector, including timely exports to help mills to take advantage of higher prevailing global prices and the much-vaunted ethanol blending implementation, hinges on this price.

Farmers groups from regions such as West Uttar Pradesh, where floods affected several cane growing districts, are demanding that sugar mills pay them as high as Rs300 a quintal, against a price Rs280 paid last year against a backdrop of perceived shortage.