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With over four million cane farmers, it is not surprising that successive governments in Uttar Pradesh have chosen to fix the price at which sugar mills buy cane (state advised price, SAP) at well above what the Central government's Commission for Agricultural Costs and Prices (CACP) thinks is a fair and remunerative price (FRP), based on the value of what the cane fetches after processing and the costs involved in this. Last year, as against the FRP of Rs 170 per -quintal, UP's SAP was Rs 280. As a result, with most sugar mills in the state declaring huge losses —
Rs 509 crore for Bajaj Hindusthan in the September quarter and
Rs 122 crore for Balrampur Chini — the mills have been up in arms and, on Wednesday, decided to down shutters.
For what it's worth, while this year's FRP has been raised to
Rs 210, UP has stuck to last year's Rs 280, despite neighbouring Haryana fixing its SAP at Rs 300 — while that is a relief, since farmers wanted Rs 320, it is of little help to a bleeding sugar industry in the state that says, with sugar prices falling,
all they can afford is a much lower Rs 220 or so.