Punjab government likely to increase cane price by Rs 10 per quintal

The state is all set to increase the state advised price (SAP) of sugarcane by Rs 10 per quintal even as the retail price of sugar remains over Rs 3,200 per quintal.

The price of cane procured from growers (SAP) has not been increased by the government for the past two years. This had led to resentment among the cane growers, especially when the prices of sugar continued to soar. The seven private and nine cooperative sugar mills in the state have been paying an SAP of Rs 295-Rs 310 per quintal to the growers since 2018-19.

The proposal of a hike in the price was likely to be placed before the Punjab Cabinet for its nod, after it is approved by the Sugarcane Development Board in September.

As recommended by the NITI Aayog, the state is in favour of linking the SAP to the market price of sugar. Since sugar prices are over Rs 3,200 per quintal, the price of cane can be revised this year.

The Centre had recently announced a hike in the fair and remunerative price (FRP) of cane by Rs 10 per quintal to Rs 285 (for sugar recovery of 10 per cent) and at Rs 270.75 for the recovery rate of 9.5 per cent. Punjab’s sugar recovery rate from cane averages at 9.5 per cent, which forced state Cooperation Minister Sukhjinder Singh Randhawa to reject the meagre hike in the FRP of cane.

What is State Advised Price (SAP):-

State Advised Price (SAP) is the price set by state governments.
It is the price that mills would have to pay farmers instead of the FRP.
It strengthens farmer’s interests.
Typically, SAP is higher than FRP.
There have been divergent views on which is a fair price to both farmers and millers.