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Home / Politics / Policy /  UP govt keeps minimum sugar cane price at Rs280/quintal

Lucknow: Uttar Pradesh (UP) government on Wednesday kept the minimum sugar cane price unchanged at Rs280 a quintal for 2013-14, refusing to give in to demands for a lower sugar cane price by cash-starved millers who have threatened not to start crushing operations.

The state government has not hiked the state advisory price (SAP) of sugar cane but the industry considers the prevailing price as high and “unviable" to ensure crushing operations this year.

It was anticipated that the state government would hike prices as a sop for farmers ahead of 2014 Lok Sabha polls.

The industry feels that mills cannot pay SAP—the minimum rate at which mills buy sugar cane from farmers—more than Rs225 per quintal this year as sugar prices are lower.

Faced with a cash crunch, more than 60 private sugar mills in Uttar Pradesh, including Bajaj Hindusthan Ltd. and Balrampur Chini Mills Ltd., on Tuesday announced they would not start crushing operations in the 2013-14 marketing year until viable sugar cane prices are set by the state government.

In contrast to the industry’s demand for lower SAP, the opposition parties lashed out at the UP government saying that the SAP was “inadequate" for covering farmers’ cost.

According to a government spokesperson, the UP government has fixed the SAP of Rs280 per quintal for common variety, while Rs290 for early maturing variety and Rs275 for inferior sugar cane. Prices have been fixed keeping in mind that the sugar cane rates should be beneficial to farmers while maintaining the continuity of the sugar industry, he said.

The decision to keep SAP unchanged at last year’s level comes in the backdrop of huge financial losses to the tune of Rs3,000 crore incurred by the UP millers in 2012-13, which led to sugar cane arrear of Rs2,400 crore towards farmers.

Besides keeping the SAP unchanged, the UP government has exempted mills from paying a purchase tax of Rs2 per quintal so as to give relief to mills facing cash crunch. With the fixing of minimum prices, nearly Rs22,500 crore is estimated to be paid to farmers in 2013-14, he added.

To provide relief to the Rs80,000 crore sugar industry, agriculture minister Sharad Pawar said the Centre is considering measures including interest free loans to mills and a final decision in this regard shall be taken in the next 8-10 days. PTI

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