Consideration of an Increase in the State Advised Price (SAP) for Sugarcane in Uttar Pradesh Before Diwali

Lucknow. With assembly elections approaching in Uttar Pradesh next year, the state government is rapidly announcing a series of new schemes, policies, and decisions. As part of this sequence, the government is now considering an increase in the 'State Advised Price' (SAP) for sugarcane, with the aim of appeasing the vast farming community.

It is noteworthy that Uttar Pradesh is the largest sugarcane-producing state in the country. It is one of five states in India where, in addition to the 'Fair and Remunerative Price' (FRP) set by the central government, a 'State Advised Price' (SAP) is determined by the provincial government. While it is not mandatory to increase the SAP every year, the government is keen to leverage such a significant opportunity to its full advantage. However, there are complications surrounding any potential increase in the sugarcane SAP.

Currently, the SAP for sugarcane in Uttar Pradesh is set at ₹400 per quintal. Farmer organizations are strongly demanding an increase of ₹100, pushing for a rate of ₹500 per quintal, whereas the sugar industry opposes this. Millers argue that the SAP has already reached a very high level and should not be increased further.

They point out that the central government has not adjusted or raised the 'ex-factory minimum selling price' of sugar for the past six to seven years, keeping it stagnant at ₹3,100 per quintal. Meanwhile, the cost of sugar production has risen significantly, and the government has also recently imposed a ban on the production of ethanol from sugarcane-based feedstocks. A final decision from the government is currently awaited.