The fight for sugarcane price in UP takes a political colour

Written by Sanjay Jog | Sanjeeb Mukherjee | New Delhi/Mumbai | Updated: Nov 8 2009, 05:58am hrs
From being a conflict between growers and millers, the sugarcane impasse in Indias leading cane-growing state, Uttar Pradesh, is slowly turning into a larger political battle.

Rashtriya Lok Dal leader and former Union minister Ajit Singh is soliciting the support of other political parties, including the Left, to agitate for the rights of farmers and plans to raise the issue prominently in the coming session of Parliament.

The Centres insistence that the fair and remunerative price (FRP)which it announced recently replacing the statutory minimum price (SMP)is almost 15% more than the earlier price and is just a floor price, and that millers are free to pay more than the FRP has failed to assuage the farmers. They have now threatened to gherao Parliament when the winter session starts.

In Maharashtra, the countrys other major sugarcane-producing state, although procurement has been relatively smooth than in Uttar Pradesh, low cane supplies owing to a weak monsoon has severely affected the mills. However, the agitation in UP has had no cascading effect in Maharashtra, said an officebearer of Saikrupa Sugar Mill. Situated in western Maharashtra, the mill is currently crushing 2,000 tonne sugarcane per day against the installed capacity of 1,200 tonne a day. Our mill has announced the first installment of Rs 1,850 per quintal for the 2009-10 crushing season and it is open to further increase. But this depends on the import of raw sugar in the state, he added.

In 2008-09, Maharashtra produced 40 lakh tonne sugar by crushing 400 lakh tonne cane. At the end of the season there was 5 lakh tonne of stock in addition to 2 lakh tonne imported sugar. For the 2009-10 season, the state government expects sugar production to marginally rise to 48 lakh tonne by crushing 410 lakh tonne cane.

However, the biggest loser in this imbroglio has been the common man, who, after reeling under the impact of an unprecedented rise in sugar prices, was hoping for some respite once the new crop was crushed. Sugar prices, which have already moved up by a whopping 87% since January, have again started rising because of the delay in crushing and low inventories with mills.

On Friday, wholesale sugar price in Kolhapurone of the biggest markets in western Indiatouched a new record of around Rs 34 per kg, indicating a jump of almost 2% within a couple of days. Experts believe if the deadlock between millers and growers is not resolved soon, retail sugar prices could further rise as supplies are already scarce.

Indias sugar production in 2009-10 (October-September) is projected to be around 15-17 million tonne, marginally more than last year, but well short of the total demand of around 23 mt. The country needs to import around 5-7 mt sugar to meet its demand.