Farmers to bring more land under cane on high SMP

Encouraged by the government’s decision to raise the statutory minimum price (SMP) of sugarcane, farmers are planning to bring back the area diverted last year to other remunerative crops, including oilseeds and cotton, under cane cultivation.

The total acreage under sugarcane slumped to 4.4 million hectares in 2008-09 from 5.04 million hectares in the previous year, thus, witnessing a diversion of 0.64 million hectares.

Farmers in Maharasthra are keen on sowing adhsali (half-yearly) and 18-month crops, which are sown with the onset of monsoon in early June. But as the government’s decision to raise SMP by 33 per cent came before the commencement of sowing this year, the diverted area is likely to come back to sugarcane, according to S L Jain, director general of Indian Sugar Mills Association (ISMA).

The Cabinet Committee on Economic Affairs (CCEA)on June 26 approved a 32.74 per cent increase in the SMP of sugarcane for the 2009-10 season (October-September). The revised price is Rs 107.76 a quintal as against Rs 81.18 a quintal during the previous year.

The sugar output slumped almost by half to 14.7 million tonnes last year as farmers shifted their sowing area to cotton and oilseeds that offered better return than sugar. The SMP is linked to a recovery of 9.5 per cent, which means that the grower gets a premium of Rs 1.13 for every 0.1 percentage point increase in recovery. During the season 2007-08, sugar output was 28.5 million tonnes that brought the price down to Rs 14 a kg.

Farmers’ confidence level would increase with the government’s favourable and timely decision, said a senior executive of one of the largest sugar mills in the country. The government of UP, the largest sugar producer, has not raised the state advised price (SAP) so far from Rs 140 a quintal last year, as any raise would be unviable for sugar mills.

UP sugar mills had been paying farmers an affordable price, which had already brought them into financial troubles. Any further rise would affect sugar mills badly, said an official with one of the largest sugar mills in UP. Last year, 132 out of 154 mills in UP operated with almost 75-80 per cent of their crushing capacity and announced their closure about 45 days ahead of the normal season.

“Sugar mills in Maharashtra are dominated by co-operatives, which are run by farmers. Hence, any decision favouring farmers is welcome as it will enhance sowing next season,” said Prakash Naiknavare, Chairman, Maharashtra State Federation of Co-operative Sugar Factories.