The approaching elections in Uttar Pradesh have upped the stakes in fixing the minimum support price for sugarcane in the state. The Rajnath Singh government wants to raise the state-advised price (SAP) by Rs 50 per tonne, from Rs 900 now, for the new crop year 2001-02 (October-September). The sugar industry in the state, which already has pending dues of over Rs 1,000 crore to be paid to farmers and is burdened with huge sugar stocks, wants the SAP to be maintained at the current level. However, given the political compulsions, it seems inevitable that there will be a hike in the sugarcane price. SAP-induced troubles afflict other sugar-producing states too. In Tamil Nadu, a white paper tabled recently in the assembly acknowledged that high SAP for cane has severely affected the finances of sugar mills in the state, pushing many into the red. Other states also have sugar mills reeling under huge debt burdens as a result of arbitrarily fixed cane prices.
