NEW DELHI: With dwindling cane supplies leading to low capacity utilisation and premature shutdown of plants, sugar mills in Uttar Pradesh are now offering farmers an extra Rs15 a quintal to induce them to plant more area under the crop.Taking lead
The lead in this direction has been taken by Simbhaoli Sugars Ltd., which has announced a 'cane development subsidy' of Rs 15 a quintal over and above the Rs 145 State Advised Price (SAP) that mills in UP are paying to growers in the current 2008-09 crushing season (October-September).
"We are giving this special incentive only for the cane delivered to our mills from February 1. For the earlier supplies, growers will be entitled to only the SAP of Rs 145 a quintal," said Dr. G.S.C. Rao, Executive Director, Simbhaoli Sugars.
The purpose behind the additional price is to induce farmers to plant more cane this time, so that the mills will have adequate raw material in the ensuing 2009-10 season.
Simbhaoli Sugars' 'cane development subsidy' move has made all major sugar combines in the State decide to offer the extra sop.
Following Simbhaoli's move, all other major sugar combines in the State - including Bajaj Hindusthan, Balrampur Chini and Triveni Engineering - have decided to offer the extra sop.
"We had no option because the manufacturers of gur and khandsari (alternate sweeteners) have been offering Rs 160-165 to farmers. The cane that ought to be reaching us is, instead, getting diverted to kolhus and crushers," said Mr. Rakesh Bhartia, CEO, Bajaj Hindusthan.
Eye on area
Dr. Rao said that by paying the extra Rs.15, "we hope that the growers, instead of supplying the cane to kolhus, will use it in planting more area".
In fact, Simbhaoli is offering the incentive mainly in the form of free fertilizers and agro-chemicals. Even in the vent of cash disbursal, "we will make the releases conditional upon the grower planting the targeted area," he added.
Insufficient crop
Planting of cane takes place in UP during March-May.
The plant-cane that will be sown this time will be ready for crushing only from next February. Normally, this cane would last till end-April, whereas this time, most mills will not have sufficient crop to crush beyond Holi (falling on March 11).
Mills in Tamil Nadu, too, have been offering similar sops to cane growers at the rate of Rs.5000 per acre (for early October-December planting) and Rs.3000-4000 per acre for the main planting season (January-April).
- Harish Damodaran
(THE HINDU BUSINESS LINE: 13.2.2009)
