Sugar mill owners in Uttar Pradesh are a worried lot these days. With a dwindling supply of cane already a nagging pain, coupled with the issue of sugarcane pricing, the looming prospect of a failed monsoon has only added to their woes. Though none of the mill owners are willing to admit the panic button needs to be hit yet, a close watch is being maintained on the below normal rains this year.
?Though monsoons are late this year, it is still too early to say that it is a drought-like situation. It is slightly premature to pass the judgment and predict what will happen in the forthcoming crop season. Our only respite is that despite the delay, cane will not suffer huge losses if it rains in the next few days. We still have time and since sugarcane is a very hardy crop, it will make up for the lost time,? says a spokesperson of one of the leading sugarcane mills in the state.
As per the latest data from India Meteorological Department (IMD), southwest monsoon in the crucial western part of Uttar Pradesh, which grows most of sugarcane, has been around 80% below till July 8. The area received around 110% more rains during the same period last year.
Apart from the deficient monsoon, the other problem that is plaguing the cane farmers is the severe shortage of fertilisers. ?Though there is an actual dearth of fertilisers in the state, heavy black-marketing of it is putting off the farmers,? says a senior member of ISMA.
The millers have been trying to please and pamper the farmers to no end since the last season, when the state was facing a crisis in production due to a decline in sugarcane output. The shortage forced as many as 91 out of the 132 mills in the state to close by February-end and the remaining 41 by the mid-March. The main reason behind this was the drastic fall in the area under cane cultivation due to the disenchantment of the farmers towards growing sugarcane. Instead, many of them had started moving to sowing paddy and wheat. To offset the problem, millers had started wooing the farmers by offering them extra Rs 15-20 a quintal last year and inducing them to bring more areas under cane cultivation for next year so that they have adequate raw material in the 2009-10 seasons.
The situation in UP gets more complicated due to the fact that apart from the low supplies and a decadent monsoon, the issue of cane pricing, too, assumes a political colour. While the Centre has already hiked the SMP of sugarcane from Rs 81.18 per quintal to Rs 107.76 per quintal this year, the Uttar Pradesh government usually offers an additional price to the farmers in the form of state advised price (SAP), which are much higher than the SMP and is inadvertently challenged by the millers.
This year, the government is yet to declare the SAP while millers are keeping their fingers crossed. ?A hike of about Rs 5 is okay with the millers, but the government has been increasing to the tune of Rs 15, which is very high and will adversely affect not only the millers but also the farmers in the long run,? said another miller on condition of anonymity.