The tug-of-war between the Centre and the Uttar Pradesh government on sugarcane prices refuses to end with Chief Minister Mayawati asking Prime Minister Manmohan Singh to review a recent Cabinet decision that requires states to pay the difference between the central government-announced fair and remunerative price (FRP) and the state-advised price (SAP).
On Thursday, the Union Cabinet had approved an FRP of Rs 129.84 per quintal for the 2009-10 season, which runs from October to September, to be applicable in all states.
The FRP also replaces the statutory minimum price of Rs 107.76 that was declared in June this year.
This was done by amending the Essential Commodities Act (ECA), 1955, through an ordinance, and amendment to the Sugarcane (Control) Order, 1966.
The state government had announced a SAP of Rs 165-170 a quintal.
“The state’s right to fix SAP was recognised by the Supreme Court. The government of India did not take the state government into confidence before making the amendments related to FRP.
Thus, the interests of about 4 million cane growers of UP were ignored…The FRP announced by the government has enraged farmers considerably. FRP had indirectly ended the rights of the state government,” Mayawati said in the letter to the prime minister.
UP is the second-largest sugar producing state of the country. Industry experts, however, said the central government had wide powers under the ECA since it fell under the Ninth Schedule of the Constitution and states could not legally challenge it. Mayawati claimed that over the last few years, the central government had continuously raised support prices of crops like wheat and paddy, while the price of sugarcane was raised by minimal amounts.
“Owing to the crop prices policy of recent years, the area under sugarcane and sugar production has been decreasing continuously,” she said.