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Harish Damodaran

Not a feasible suggestion, says CACP

New Delhi , Oct. 2

The Commission for Agricultural Costs and Prices (CACP) has rejected the idea of fixing differential Statutory Minimum Prices (SMP) for sugarcane grown in tropical and sub-tropical regions of the country.

The demand for having lower cane prices in the tropical western and southern States vis-à-vis the sub-tropical northern region was voiced late last month at the 47th Annual General Meeting of the National Federation of Cooperative Sugar Factories Ltd (NFCSFL) by its President, Dr M.R. Desai.

Higher realisations

The argument put forward by the southern and western mills was that their sugar realisations are about Rs 100-150 a quintal below what factories in the North get. On the other hand, cane yields and sugar recoveries are also higher in tropical regions. The average per hectare cane yield comes to over 100 tonnes in Tamil Nadu and 85 tonnes in Maharashtra, whereas it is hardly 60 tonnes in Uttar Pradesh.

Similarly, factories in Maharashtra produce 11.5-12 quintals of sugar for every 100 quintals of cane crushed, whereas the average sugar recovery in UP is well below 10 per cent. The main reason for this difference is the winter months in the North, which prevent the planted cane crop from growing beyond 9-10 months. In contrast, the cane in Maharashtra grows for 12-15 months, during which time it also accumulates more sugar.

"As the yield of sugarcane is higher and sugar price realisation lower in tropical regions, the fixation of SMP should be separate here from that of the non-tropical region," according to Dr Desai.

However, the CACP had ruled out any move to have differential cane prices. "By this logic, we should fix lower minimum support price for wheat in Punjab, considering that farmers there harvest much higher yields than farmers in Madhya Pradesh. It is not a feasible suggestion," a top CACP official told Business Line.

More Stories on : Sugar | Agricultural Policy

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