Sugar economy faces crisis in riot-hit UP belt

Sugar economy faces crisis in riot-hit UP belt

Riot-hit Muzaffarnagar may now be looking at a crisis in its sugar economy.

Riot-hit Muzaffarnagar may now be looking at a crisis in its sugar economy. With private mills in the state refusing to start crushing until the Uttar Pradesh government clarifies cane prices,harvesting of crop that should have begun by now has not yet started.

A key cane-growing district,Muzaffarnagar is reported to have the highest agricultural GDP in UP. With recent incidents again bringing the district to a boil,officials are worried over the prospect of a large number of youth finding themselves unemployed.

Farmers make up nearly 70 per cent of the population in the district. While Jats own much of the farmland,Muslims form over 80 per cent of the workforce.

The government generally wraps up meetings with millers and farmers for designating cane areas to factories by September,after which the cane commissioner issues ‘reservation orders’ directing farmers to supply cane to their designated mill.


By this time in Muzaffarnagar,mills usually start crushing for the new sugar year.

This year,the government has completed the process of reservation and declared dates for 24 cooperative sector sugar mills to start crushing. “All cooperative mills will start crushing in November,” said Bhupendra Singh Bisht,chief publicity officer,cane commissioner’s office.

However,private sugar mills have declined to obey. The industry,which has claimed losses of around Rs 4,000 crore over the last two crushing seasons due to low sugar prices and “high” state advisory price (SAP) in UP,has said mill owners would not be able to pay more than Rs 240 per quintal,fixed last year.

The industry has also demanded that the government declare the SAP for 2013-14 before the mills start crushing.

“Unless the cane prices are known and they are viable for both industry and farmer,industry can’t start crushing cane,” Deepak Guptara,secretary,UP Sugar Mills Association,said.

UP has one of the highest SAPs for sugarcane in India.

Incidentally,private sugar mills in UP already owe farmers nearly Rs 2,500 crore for last season,and that is without factoring in any interest on delayed payments. Most of the farmers owed money are in the Muzaffarnagar-Shamli belt and the Baghpat region.

A standing sugarcane crop also means farmers can’t prepare for their next crop,wheat,which is generally sown by the second week of November.

Cane growers in most of western UP,including Muzaffarnagar,are faced with the prospect of either burning their crops to make way for wheat or selling these at a much lower price than the SAP of Rs 280 per quintal fixed in 2012-13. In eastern parts of the state,farmers have a window of a couple of days more before they need to start harvesting.

Muzaffarnagar,which also has some steel and paper production,has a total of 11 sugar mills that receive cane produced from the surrounding region. Naveen Mandi Sthal on the eastern outskirts of the city is the trading hub for jaggery and other agriculture produce.