...but gap between fair price and state-advised rates is still huge

CHANDIGARH: Despite the Haryana government raising the state advised price (SAP) of sugarcane by Rs 10 to Rs 372 per quintal for the 2022-23 crushing season, the stalemate over pricing of the cash crop continues as farmer outfits, especially BKU (Charuni), have rejected the hike. Farmer bodies are seeking Rs 400 per quintal as SAP and have announced to continue their agitation for the higher sugarcane rate.
Haryana hiked SAP following the recommendation of a committee set up to look into the demand of farmers who were mounting pressure by holding protests and stopping the supply of sugarcane to mills in the state. Even as farmer groups have dismissed the SAP hike as paltry, it is way over the fair and remunerative price (FRP) announced by the Union government for the 2022-23 sugar season.

The FRP for sugarcane for the sugar season 2022-23 (October-September) in India was raised to Rs 305 per quintal, up by Rs 15 per quintal, from the 2021-22 season. The Cabinet Committee on Economic Affairs (CCEA) had, on August 3, 2022, approved the FRP of sugarcane for 2022-23 sugar season.
The FRP for 2022-23 sugar season was 5.17% higher than the previous season’s Rs 290 per quintal. The approved FRP was applicable for the purchase of sugarcane from farmers in 2022-23 sugar season (starting October 1, 2022) by the mills.
The FRP is determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP) after consulting the state governments and other stakeholders.
While the Centre announces the FRP to be paid by mills to farmers, several states have their own mechanism to determine the cane rates to be paid to growers — SAP. In its ‘Price Policy for Sugarcane: 2022-23 Sugar Season’, the CACP has again recommended that states stop fixing the SAP.
The commission stated that four states — Haryana, Punjab, Uttarakhand and Uttar Pradesh — intervene in sugarcane pricing by announcing the SAP, which largely remains higher than the FRP. “Since sugar mills are required to pay SAP, which is higher than the FRP, it results in mounting cane price arrears to farmers, especially when sugar prices are low. Due to increase in sugar recovery rate, the difference between SAP and FRP has significantly reduced in Uttar Pradesh in 2020-21. However, during 2021-22, with the UP government’s recent announcement of hiking SAP for all three categories, the SAP-FRP gap has again increased,” CACP stated in the pricing policy for 2022-23.
In its ‘Price Policy for Sugarcane: 2022-23 Sugar Season’, the CACP reiterated its recommendation that states should stop fixing the SAP. It said that if states wanted to continue with the SAP, they should transfer the difference between FRP and SAP to cane farmers through direct benefit transfer.