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UP cane farmers look at pay hurdle as mills say crushing more, getting less sugar

Mills in the state have so far crushed 86.187 lakh tonnes (lt) of cane and produced 8.018 lt sugar at an average recovery rate of 9.30 per cent in the current season.

Written by Harish Damodaran | New Delhi | Updated: November 25, 2020 7:25:16 am
A meeting of the UP government’s cane price fixation committee is scheduled in Lucknow on Wednesday.

Sugar mills in Uttar Pradesh are worried about low recovery levels of the sweetener from cane in the 2020-21 crushing season (October-September), which, they say, will increase production cost and make it further difficult to pay farmers.

Mills in the state have so far crushed 86.187 lakh tonnes (lt) of cane and produced 8.018 lt sugar at an average recovery rate of 9.30 per cent in the current season.

For the corresponding period of 2019-20, they crushed 73.629 lt cane and produced 7.322 lt sugar at a higher recovery of 9.94 per cent.

“We are crushing more cane, but are producing 6 kg less sugar from every tonne. At existing sugar realisations of Rs 31/kg, that translates into a loss of almost Rs 19 per quintal of cane. How will we pay even the present, forget higher, cane price,” an official from the UP Sugar Mills Association (UPSMA) asked.

A meeting of the UP government’s cane price fixation committee is scheduled in Lucknow on Wednesday. The committee is expected to take a call on the state advised price (SAP) of cane payable by mills for the 2020-21 season. The cane SAP under the Yogi Adityanath-led BJP government has been raised by only Rs 10/quintal (from Rs 305 to Rs 315 for general, and from Rs 315 to Rs 325 for early-maturing varieties) since 2016-17.

Explained

Why higher cane price is a tough call

Cane prices in UP have gone up by hardly 3.3% since 2016-17 and there is political pressure on the Yogi Adityanath government to raise it for the current season. But with mills already saddled with over Rs 5,700 crore dues to farmers, and lower sugar recovery from cane adding to their production cost, it is a tough call.

While there is pressure on the state government to increase cane price after a long gap, mills are, however, yet to discharge even their past SAP dues. During the 2019-20 season, they crushed 1,118.02 lt of cane whose average SAP value was Rs 35,898.14 crore. But as of November 17, they had paid only Rs 30,164.69 crore, translating into arrears of Rs 5,733.45 crore.

“We have sought that the SAP for 2020-21 be maintained at last year’s level and also permission to make the cane payment in 2-3 installments. Further, the state government should provide a cane subsidy of Rs 15/quintal to compensate for the lower sugar recovery,” the UPSMA official said.

The reduced sugar recovery is being blamed mainly on climatic factors. The early onset of winter – more specifically, low difference between day and night temperatures – is said to have affected sucrose accumulation in cane. But Dr Bakshi Ram, director of the Indian Council of Agricultural Research’s Sugarcane Breeding Institute, Coimbatore, said lower recovery could also be due to the extended crushing season in 2019-20.

He said most mills in UP crushed cane through May and some even ran till early-June. The cane that mills are now crushing is the “ratoon” that springs automatically from the stubble of the 2019-20 plant-cane. The ratoon crop needs to grow for at least nine months to accumulate enough sugar.

“If mills are now crushing the ratoon from the plant-cane harvested after April, it is bound to impact sugar recovery,” Dr Ram told The Indian Express.

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