The fate of Uttar Pradesh's Rs 35,000-crore sugar industry, which is the largest agriculture-based industry is hanging in balance, largely dependent on one factor, vis-a-vis, sugarcane prices. The UP based sugar mills, heading towards a crisis on the pricing of cane this year, have put crushing operations on hold and have sent notice of suspension to the UP government under the Industrial Dispute Act.
Private Mills, numbering almost 100, in their letter underscored their disability to continue their show with this growing amount of losses and liquidity crunch, mainly caused by state’s pricing policy.
These sugar mills, putting their foot down on higher sugarcane pricing issue, not only resisted from paying the Special-Advisory Price (SAP) of more than Rs 225 a quintal for the current season’s purchases, but have also demanded adoption of Rangarajan formula for determining the cane prices. Besides, the industry has threatened no further investments would be made in the sugar sector.
The special advisory prices, which sugar mills in Uttar Pradesh (UP) pay to farmers has zoomed by 70% from Rs 165, just three years back, to Rs 280. On the other hand, sugar prices have been hiked by just 7-8 percent over the last three years.
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