Sugarcane price issue may sour UPA's winter session

The six month-old second United Progressive Alliance (UPA) government may suffer a major loss of face in the upcoming winter session of the Parliament as it stands against an united Opposition over the sugarcane pricing ordinance issued last month.

The ruling coalition doesn't enjoy a clean majority in the Rajya Sabha and may trip in the Upper House as the Opposition parties claim unity against the ordinance that seeks to burden the state governments with the additional expenses if it announces higher State Advised Price (SAP) for sugarcane than the Centre's Fair and Remunerative Price (FRP).

There are currently 263 members in the Rajya Sabha, and at least 138 MPs are likely to oppose the bill. These numbers also include parties like the Samajwadi Party (SP) and Lalu Prasad's RJD. These parties are providing outside support to the second UPA but, at the same time, have publicly denounced the ordinance.

"We will not sit quiet if the sugarcane mill owners start to decide the fate of farmers. We have had discussions and have chalked out a strategy on the issue," SP General Secretary Amar Singh had said recently. The BJP and the Left parties — with 67 MPs between them — have also decided to vote against the ordinance when it comes as a Bill in the Parliament.

An ordinance is valid for a maximum of six months. It has to be passed in both the Houses of the Parliament to become an Act, failing which, the ordinance will lapse.

Sharad Pawar's food ministry managed to pass the ordinance in the Cabinet last month, even as a section of the Congress remained apprehensive about its future. The ordinance is expected to discourage states like Uttar Pradesh and Tamil Nadu from declaring a SAP for sugarcane as the new order requires state governments to pay the difference over and above the sugarcane price announced by the Centre. Leading companies like Bajaj Hindusthan and Balrampur Chini, among others, who pay SAP, stand to gain from the consequent level-playing field with companies that operate in states of Maharashtra and Karnataka.

While exercising powers under the Essential Commodities Act, 1955, the government introduced an ordinance to amend the Sugarcane (Control) Order, 1966 to replace the statutory minimum price (SMP) with an FRP which will be fixed by the government from time to time.

Uttar Pradesh, Uttarakhand, Punjab, Haryana and Tamil Nadu are five states which declare SAP. This is different from the SMP which is declared by the Union government. Other major sugarcane producing states like Maharashtra, Karnataka, Andhra Pradesh and Bihar follow the SMP.