Good news for UP sugar mills

For the second year in succession, the Akhilesh Yadav government has decided not to increase the State Advised Price (SAP) of sugarcane.

While the price for the three different varieties of  sugarcane remains what it was in 2012, a couple of concessions as well as subsidy have been offered to the sugar mills, who always complained against the traditional practice of annual enhancement of SAP by successive state governments. The government had adopted the same policy in 2013.

A decision to that effect was taken by the state Cabinet to keep the SAP at Rs 290 per quintal for the advanced variety of sugarcane, Rs 280 for the common variety and Rs 275 for the below average variety.

However, sugar mills have been given the privilege to pay the amount to the sugarcane grower in two instalments. While the first instalment would be at the rate of Rs 250, Rs 240 and Rs 235 respectively for the three different varieties, the remaining amount of Rs 40 per quintal for each of the varieties would be payable within three months of the closure of the crushing season.

Significantly, the state government would be compensating the sugar mills with 50 per cent of the second instalment. According to the principal secretary (sugar industries) Rahul Bhatnagar, “The government has decided to waive the purchase tax of Rs 2 per quintal, the entry tax of Rs 2.80 per quintal, as well as the local mandi samiti commission of Rs 6.60 per quintal, in addition to a subsidy of Rs 8.60 per quintal.”

He went on to add, “However, these concessions would be available to the mills only with a rider which clearly lays down an upper limit on the price of sugar, molasses, bagasse and press-mud.”  The prescribed limit is Rs 3,100 per quintal for sugar, Rs 390 for molasses, Rs 167 for bagasse and Rs 26 for press-mud right through between October 1, 2014 and May 30, 2015. “In case the prices of these by-products crossed the laid down ceilings, the subsidy of Rs 8.60 per quintal would not be admissible,” Bhatnagar pointed out.

While crushing had commenced in about 20 per cent of the state’s sugar mills, it would get started in the remaining 80 per cent mills by the end of this month.