UP sugar mills to pay Rs 180/qtl

The price to be paid is much higher than the FRP and SAP decided earlier.

Sugar millers in Uttar Pradesh are believed to have agreed to pay sugarcane farmers about Rs 180 a quintal for buying their produce that may allow early resumption of sugar production. The decision was understood to have been arrived at a meeting called by the Food and Agriculture Minister Sharad Pawar today, sources said.

Though the price offered by the millers is higher than the centre’s Fair and Remunerative price (FRP) of Rs 129 and the State Advised Price (SAP) of Rs 160-170, it is much lower than the Rs 280 a quintal that farmers have been demanding.

A source said millers were ready to pay incentives over and above the SAP. Millers also informed the minister that crushing might start this week in UP. Sugar mills have been lying idle due to the farmers’ protest.

Briefing the media, Pawar said, “I had a meeting with UP Sugar Mills Association. I appealed to them to discuss with farmers and resolve the issue. We are trying to see that crushing operation starts in UP as early as possible.”

Mills in southern states like Tamil Nadu and Karnataka as well as in Maharashtra and Gujarat have started crushing, he said, adding that there was no such problem with co-operative sector sugar mills in Maharashtra.

“Mills have assured that they would discuss the issue with the farmers with an open mind and try to find a a solution,” Pawar said, adding that “given the rising price of sugar, mills need to pay more than the FRP.”

Asked whether mills would pay the SAP, Pawar said they would have to pay much more.

Pointing out that the country needs sugar as there is a shortage and a gap between demand and supply, Pawar said, “I appeal to the farmers organisation and the state government that farmers have every right to get good price, but there should be no obstruction in processing imported raw sugar.”

Through processing of imported raw sugar, he said there will be an additional availability of sugar, which would help the consumers, who are facing difficulties due to high prices.

India’s sugar production is estimated at 16 million tonnes in 2009-10 season, which started last month. The country’s annual domestic consumption is pegged at about 23 million tonnes.

The Centre has allowed imports of raw sugar as well as refined/white sugar to bridge the gap between demand and supply.

Since February, the country has contracted over five million tonnes of raw sugar and nearly one million tonnes of refined sugar to increase domestic availability and check rising prices of the sweetener. In last one year, sugar prices have doubled to Rs 35 a kg from Rs 17 a kg.