Food & Beverage News: Top Stories - Centre bungles on sugar ordinance, makes opposition <br>united

Proceedings in both Houses of Parliament were stalled for the second consecutive day on Friday with the opposition members in no mood to relent on the controversial sugar control ordinance that forced thousands of sugar farmers from Uttar Pradesh to lay a siege on the Parliament House on the opening day of the winter session. “Kala kanoon vapas lo,” shouted opposition MPs, referring to the Ordinance. Despite pleadings from the Speaker, they refused to take their seats, forcing Meira Kumar to adjourn the Lok Sabha till Monday. The scene was similar in the Rajya Sabha and chairman Hamid Ansari too adjourned the Upper House until Monday.

The beleagured opposition was waiting to pick up a stick to beat the government with. That came in the form of a hasty ordinance issued on October 21through a gazette notification and given ex-post approval on October 29. Before that, the Centre had replaced the SMP (statutory minimum price at Rs 107 per quintal) for sugarcane with FRP (fair and remunerative price) at Rs 129.85 per quintal, while the Uttar Pradesh state advisory price (SAP) had been set at Rs 165-170 a quintal. In the process, the farmers in Uttar Pradesh would be losing Rs 35-40 per quintal.

Fixing a fair price was good enough, but what went wrong was a provision in the ordinance that states “If any authority or state government fixes any price above the FRP fixed by the Centre under clause 3, such authority or state government shall pay the amount, which it fixes above the fair and remunerative price as fixed by the central government, to the grower of sugarcane or to the sugarcane growers cooperative society, as the case may be.” The ordinance, in its preamble, also says that the state governments announcing higher pricing of levy sugar than that by the Centre would have to bear the extra cost.

This means that the state governments can no longer announce an SAP for sugarcane higher than the FRP, unless it is willing to shell out the difference from its own exchequer. All these years states like Uttar Pradesh had announced higher SAPs bowing to pressure from farmer lobbies.

The government, bowing to protests from the farmers and intervention of Rahul Gandhi, on Thursday agreed to review the ordinance. Amendments in the sugarcane ordinance would mean ensuring that the liability did not transfer to the states. One of the ways, it was suggested, was to delete references to “state governments” in the ordinance.

It may be argued that if the Centre wanted to make state governments a party to the deal, it should have consulted the states and other stakeholders before issuing the ordinance. According to top UPA sources, the ordinance, that was brought in to side-step financial liability to the tune of Rs 14,000 crore in the wake of a Supreme Court order on awarding compensation to sugarcane growers, achieved its purpose. But an oversight in its drafting appeared to have transferred this liability to the states. Non-Congress state governments would not accept this.

The issue appears to have been politicised, it is an extension of the political battle being fought in Uttar Pradesh. The BJP, Samjwadi Party and Ajit Singh’s RLD are losing their bases in Uttar Pradesh to Rahul Gandhi who is trying to bring the Congress party to the forefront in the state. And the sugarcane ordinance came as Godsend! The ordinance applies to sugarcane growers across the country. Then why only the farmers in UP are agitated?

Every body is aware of the sugar politics in Maharashtra. This is the only state that doesn’t announce any SAP and the cooperative sugar factories are required to pay only the statutory minimum price (SMP) which was just Rs 81.18 per quintal till last year when mills in UP and other states paid more than double the SMP. By raising the SMP (now FRP) to Rs 129.85 per quintal he seems to have made the farmers in Maharashtra happy while at the same time opened a pandora’s box in UP. He did not realise that the move will boomerang so fiercely.

Well, the government may amend the ordinance and yield to the farmers in UP by hiking the FRP further. That will have a chain reaction. Sugar prices have already crossed Rs 40 per kg from Rs 18-20 a year ago. The prices are expected to touch Rs 50 per kg if the cane prices are further raised. While the politicians will be happy to get a better price for the farmers, who will care for the consumers who are reeling under higher food inflation, with price of tur dal hitting more than Rs 100 a kg and apples at Rs 150. The prices of most of the food items, fruits & vegetables, poultry and fish have more than doubled during the last six months. And don’t forget the 300 million hungry and malnourished people in the country. Anyone to take up their cause?