Centre refuses to be drawn into sugar SAP controversy
Sugar politics just refuses to die down. The Centre on Friday referred the issue of state advisory price-related arrears to farmers back to CM Ms Mayawati in UP. The farmer, as usual, may suffer again.
By TNN |
NEW DELHI: Sugar politics just refuses to die down. The Centre on Friday referred the issue of state advisory price-related arrears to farmers back to CM Ms Mayawati in UP. The farmer, as usual, may suffer again.
Close on the heels of the recent directive of the Allahabad HC on the state advised price (SAP, which is usually higher than the Centre’s statutory minimum price (SMP), food minister Sharad Pawar said today that it was the duty of the state government to ‘ensure that the SAP payment was made to farmers’.
Easier said that done, since the Centre’s Rs 3,800-crore soft loan package to the sugar industry, notified early December, is related to the SMP and not the SAP for two years running, 2006-07 and 2007-08. Sugar mills, weighed down with over production and low price, have no funds to square up even SMP, leave alone SAP.
This year, the cane crushing has been delayed by more than a month and a half as mills are unable to pay farmers. This delay has hit wheat sowing too.
Farmer organisations, such as the Krishi Jagriti Manch, have already voiced apprehensions that the Allahabad HC directive could mean them forgoing a big chunk of their SAP-related earnings promised for 2005-06 and 2006-07. This year too, with output estimates at 31 mt, farmers are not hoping for anything but the bare minimum price.
UP CM Ms Mayawati is bound by an earlier Supreme Court ruling which upheld the power of the state government to announce SAP (and that came during the tenure of rival and SP supremoMulayam Singh Yadav’s stint as CM, working to his political advantage), to ensure payment since it was the state governmetn that announced the SAP in the first place.
Sugar farmers may not exactly be Ms Mayawati’s core votebank but her rival has already begun sharpening his political knife, telling the farmers that the BSP chief was selling them out. That could meand big trouble for the BSP government.
Compounding the BSP chief’s problems could be the fact that Mr Pawar made it amply clear here today that the Centre was in favour of all sugar cane growing states going in for the SMP, which was by implication based on more ‘rational’ principles than the SAP, often accused of beign used for scoring political brownie points with the farm lobby. “The industry suggestion that sugar cane pricing should be rationalised by linking its price to the price of sugar has already been deliberated upon by the government. We held discussions with the ministers of some of the key sugar producer states in October. The response was positive but considering the sensitive nature of the matter, firm committments and conclusive decisions could not be taken. The Central governmetn would make efforts to persuade the state governmetns from announcing irrationally high SAP for sugarcane,” he stressed.
To garner political gains from the sugar cane farmer, Mr Pawar has shot down a demand of the industry to increase the minimum prescribed distance between mills from 15 kms to 25 kms. That covers the cane area within which the mills can tap farmers for raw material. Increase productivity instead of asking for additional area, the minister told mill owners instead, asserting that farmers would earn more competitive sugar cane price rates if there were more mills competing for the produce.
As if that weren’t enough, the Allahabad High Court directive has, among other things, asked the UP government to reconsider scrapping the SAP level for sugar cane pricing and instead, adopt the far lower Statutory Minimum Price (SMP) announced by the Centre. The UP governmetn has been given a three month period within which to get back to the court with a ‘rational’; formula for the SAP. While that may spell relief to the industry itself, the sugar cane farmer is chewing his nails, worrying about the fate of his SAP-related arrears.
Based on the high rate of which, in the first place, s/he planted cane extensively and assiduously, leading to a super bumper harvest in 06-07. The UPA at the Centre (and Congress chief Ms Sonia Gandhi’s son and MP Rahul Gandhi has been taking active interest in the sugar cane price arrears issue), though, is sitting pretty. It has washed its hands off the responsibility for making SAP payments, pinned the responsibility firmly on the state government, even while forking out a huge bailout package for the sugar industry so that it can clear atleast a protion of the arrears to farmers and earn kudos for its role on this.
Close on the heels of the recent directive of the Allahabad HC on the state advised price (SAP, which is usually higher than the Centre’s statutory minimum price (SMP), food minister Sharad Pawar said today that it was the duty of the state government to ‘ensure that the SAP payment was made to farmers’.
Easier said that done, since the Centre’s Rs 3,800-crore soft loan package to the sugar industry, notified early December, is related to the SMP and not the SAP for two years running, 2006-07 and 2007-08. Sugar mills, weighed down with over production and low price, have no funds to square up even SMP, leave alone SAP.
This year, the cane crushing has been delayed by more than a month and a half as mills are unable to pay farmers. This delay has hit wheat sowing too.
Farmer organisations, such as the Krishi Jagriti Manch, have already voiced apprehensions that the Allahabad HC directive could mean them forgoing a big chunk of their SAP-related earnings promised for 2005-06 and 2006-07. This year too, with output estimates at 31 mt, farmers are not hoping for anything but the bare minimum price.
UP CM Ms Mayawati is bound by an earlier Supreme Court ruling which upheld the power of the state government to announce SAP (and that came during the tenure of rival and SP supremoMulayam Singh Yadav’s stint as CM, working to his political advantage), to ensure payment since it was the state governmetn that announced the SAP in the first place.
ADVERTISEMENT
Sugar farmers may not exactly be Ms Mayawati’s core votebank but her rival has already begun sharpening his political knife, telling the farmers that the BSP chief was selling them out. That could meand big trouble for the BSP government.
Compounding the BSP chief’s problems could be the fact that Mr Pawar made it amply clear here today that the Centre was in favour of all sugar cane growing states going in for the SMP, which was by implication based on more ‘rational’ principles than the SAP, often accused of beign used for scoring political brownie points with the farm lobby. “The industry suggestion that sugar cane pricing should be rationalised by linking its price to the price of sugar has already been deliberated upon by the government. We held discussions with the ministers of some of the key sugar producer states in October. The response was positive but considering the sensitive nature of the matter, firm committments and conclusive decisions could not be taken. The Central governmetn would make efforts to persuade the state governmetns from announcing irrationally high SAP for sugarcane,” he stressed.
To garner political gains from the sugar cane farmer, Mr Pawar has shot down a demand of the industry to increase the minimum prescribed distance between mills from 15 kms to 25 kms. That covers the cane area within which the mills can tap farmers for raw material. Increase productivity instead of asking for additional area, the minister told mill owners instead, asserting that farmers would earn more competitive sugar cane price rates if there were more mills competing for the produce.
As if that weren’t enough, the Allahabad High Court directive has, among other things, asked the UP government to reconsider scrapping the SAP level for sugar cane pricing and instead, adopt the far lower Statutory Minimum Price (SMP) announced by the Centre. The UP governmetn has been given a three month period within which to get back to the court with a ‘rational’; formula for the SAP. While that may spell relief to the industry itself, the sugar cane farmer is chewing his nails, worrying about the fate of his SAP-related arrears.
ADVERTISEMENT
Based on the high rate of which, in the first place, s/he planted cane extensively and assiduously, leading to a super bumper harvest in 06-07. The UPA at the Centre (and Congress chief Ms Sonia Gandhi’s son and MP Rahul Gandhi has been taking active interest in the sugar cane price arrears issue), though, is sitting pretty. It has washed its hands off the responsibility for making SAP payments, pinned the responsibility firmly on the state government, even while forking out a huge bailout package for the sugar industry so that it can clear atleast a protion of the arrears to farmers and earn kudos for its role on this.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
