The Hindu Business Line : Cane fair price not binding on UP: Farmers’ leader

New Delhi, Nov. 18 Even as the national capital is set to be besieged by cane growers from Uttar Pradesh (UP) threatening to ghereo Parliament, when it convenes for the Winter Session on Thursday, a section of farmers’ organisations have decided to call off their agitation.

Cut in cane price

“We have passed a resolution at our Mahapanhayat in Lakhimpur Kheri to supply cane to the mills, subject to certain conditions. The decision has been taken in view of kolhus (makers of jaggery) reducing their cane purchase price to about Rs 125 a quintal in many parts of eastern and central UP,” said Mr V.M. Singh, Convenor of the Kisan Mazdoor Sangathan.

Lakhimpur Kheri district is home to the Gola, Palia and Khambarkhera mills of Bajaj Hindusthan and also the Kumbhi and Gularia units of Balrampur Chini. Meanwhile, a huge gathering of farmers, mainly from western UP, is expected to converge here, against the Centre’s new ‘fair and remunerative price’ (FRP) regime for sugarcane announced by the Centre. The Centre’s FRP of Rs 129.84 a quintal is lower than the UP Government’s State Advised Price (SAP) of Rs 165-170 a quintal.

According to Mr Singh, the FRP is not applicable to UP and, therefore, there is no case for any agitation on the issue. “Our demand for a cane price of Rs 280 a quintal remains and there is nothing preventing the UP Government from declaring it,” he said.

Control order

The recent amendment to the Sugarcane Control Order, 1966 has introduced a new clause 3B, which says that if any State Government fixes a cane price above the Centre’s FRP, it is obliged to pay the difference to the growers. The mills, on their part, have no obligation to pay the higher State-fixed price.

Mr Singh’s contention, however, is that the amendment has retained clause 3A, which provides for an “agreed price” for cane between growers and mills.

“Some political parties are misleading farmers that the new Ordinance replacing the statutory minimum price (SMP) for cane with an FRP has usurped the right of States to fix cane prices. The fact is that they never had this right in the first place,” he claimed.

Mr Singh said that the States did not “fix” but only “advised” cane prices. The SAP was, further, complementary to the “reservation orders” issued by State Governments, binding growers of an area to supply cane to a particular mill for which the area has been exclusively assigned.

UP structure

In UP, the Cane Commissioner issues reservation orders under Section 15 of the UP Sugarcane (Regulation of Supply and Purchase) Act, 1953. Once the orders are issued, the growers and the mill concerned are required within 14 days to execute form B/C agreements binding the two parties to sell/purchase cane at the specified quantities and price “agreed” upon.

“The SAP is, thus, an agreed price that the State can enforce by virtue of having reserved cane area in favour of mills. Since the new Ordinance has not done away with clause 3A, the SAP will continue as an agreed price in terms of the reservation orders issued by the State Government,” Mr Singh said.

According to him, the SAP would be rendered toothless only if the State Government stops reserving cane area for mills and then unilaterally fixes prices. “In that event, the State has to pay the difference between its declared price (which is no longer an agreed price) and the FRP as per the newly inserted clause 3B”, he added.

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