Punjab demands increase in SMP of sugarcane

New Delhi, Oct 3 (UNI) Punjab today demanded an increase in the Statutory Minimum Price (SMP) of sugarcane fixed by the Centre every year on the plea that the cost of cultivation in the northern states is higher than the other parts of the country.

Making a strong plea at the State Agriculture Ministers' meeting convened by the Agriculture Minister Sharad Pawar here today, Punjab Cooperation Minister Kamaljit Singh said the SMP fixed by the Centre is the most unrealistic as even Maharashtra paid up to Rs 170 per quintal against the maximum SMP of Rs 113 a quintal.

Last year SMP was fixed at Rs 80.25 per quintal at the recovery of nine per cent with a premium of Rs 0.90 per 0.1 percentage point increase in recovery.

Because of the low SMP fixed by the Centre, the State Governments have to resort to State Advised Price (SAP) which is invariably much higher than the SMP, he added.

The low SMP also ''drastically'' affected the sugarcane production from Punjab and also worked as a disincentive against crop diversification from the present wheat-paddy cycle.

''Therefore, it will be imperative for the Centre to fix sugarcane prices on regional basis keeping in view cost of cultivation, productivity per acre, net returns from other alternate crops in that particular region,'' he said.

In Punjab, the crushing capacity of sugar mills is 112 lakh tonnes, while availability of sugarcane in the State is only 51 lakh tonnes.

Capt Singh also demanded that releasing of sugar quota to the States should be on the basis of stock held by the respective States and their local requirements and not only on the basis of total stocks lying in the country.

Two years ago, Punjab sugar mills were not allowed to release their sugar quota which rendered them unable to pay the arrears of the farmers.

The Minister said centre should revise the norms for state-wise releases of the sugar quota keeping in view their accumulated stocks and local requirements.

In fact, he made a strong case for the total decontrol of the sugar industry as is the case with other commodities.

Punjab demanded the waiving of the outstanding loans from the Sugar Development Fund since the sugar industry in the State, likely other areas facing recessionary trends and various sugar mills have not been able to pay outstanding loans obtained from SDF.

He also made a strong plea for improving the reserves and surpluses of cooperative sugar mills with the objective of strengthening them to meet their requirements in advance for the coming sugar season.

Capt Singh also demanded that blending of Ethanol in petrol up to 23 per cent should be made mandatory to stabilise sugar industry.

Other issues, he raised, included denatured alocohol in the list of special goods under the CST Act to allow ease movement of denatured ethanol within an outside States. He also sought uniform tax on denatured ethnol across the country.

Since, the States are facing power shortages, their is need to promote setting up of Co-generation plants in sugar mills and the Centre should provide liberal assistance to them by the way of grands and easy-loans.

UNI