An ambiguous Uttar Pradesh government, on the verge of a defining assembly elections, has asked sugar factories to start cane crushing operations even though it has been unable to come to any conclusion over what could be the ?right? support price for sugarcane, known as the State Advised Price (SAP).
As many as 20 sugar factories, both private as well as state cooperative, have started operations in the western part of the state, where the cane matures first. Out of the private mills, the Modi group has started operations in two, the Bajaj Hindusthan group in four factories and Simbhaoli group in one.
The ambiguity stems from the fact that while the 4 million farmers, who form a very volatile vote bank, are banking on a high SAP as the prices of all raw materials as well as labour has shot up substantially in the last one year, the industry, on its part, is trying to stress that the SAP should be kept at par with last years? cane price or hiked at the minimal as domestic prices of sugar are at an abysmal low, coupled by the fact that the industry is not being allowed to export the commodity.
Speaking to FE, a state government official said that the reason for the government?s delay in announcing SAP is an underlying fear that if it is announced now, the factories may not start crushing and may challenge the state government?s decision in the courts.
?If factories do not start operations, the farmers will turn violent, as they would demand money for their cane crop and also want their fields to be cleared in time for rabi sowing. The government, on the verge of an election, would not like a law and order problem on its hands and at the same time it would not want to antagonize the farmers. So the best thing is to ensure that the mills start crushing and announce the SAP sometime later,? he said.
A miller said that the industry was of the view that crushing should begin only after the middle of November as by that time both the SAP would be announced and the sugar recovery would also go up but the state government has not heeded to any of their representations and has, in fact, stepped up pressure tactics for beginning crushing immediately. ?Even last year, the district administration of the western districts, on the orders of the state government, forced the mill managements to start operations. This despite the fact that we think that the recovery is low at around 7% and we should wait for another fortnight at least. All this rush is because the government wants us to somehow start operations and get into crushing activity seriously, so that even if we are unhappy with the SAP, we cannot shut operations, as it would entail a lot of loss,? he said.