1. Sugarcane Payments & The SAP Mechanism
•Cumulative Price Payments: By the 2026–27 Budget, the UP Government reported cumulative sugarcane price payments of ₹3,04,321 crore to cane growers since 2017.
•Comparative Milestone: This payment was officially stated to be ₹90,802 crore more than the combined total payment made during the preceding 22 years in the state.
•Price Hike for 2025–26 Crushing Season: State Advised Price (SAP) for sugarcane was hiked by ₹30 per quintal, providing farmers an estimated additional cash flow of ₹3,000 crore.
•Understanding SAP vs FRP:
•Fair and Remunerative Price (FRP): Declared by the Central Government (Cabinet Committee on Economic Affairs) on the recommendations of CACP under Sugarcane (Control) Order, 1966.
•State Advised Price (SAP): Fixed by state governments (notably UP, Punjab, Haryana) under state cane legislation, generally higher than FRP to protect local farmer remuneration.
•Statutory Rule: Under the UP Sugarcane (Regulation of Supply and Purchase) Act, sugar mills are legally mandated to pay cane dues within 14 days of delivery, failing which interest is chargeable.
2. Industrial Modernisation & Capacity Expansion
•Crushing Capacity Added: Modernisation, expansion, and establishment of new cooperative and private sugar mills added approximately 1.25 lakh tonnes crushing per day (TCD) capacity.
•Employment Creation: The revival and modernization of sugar mills in western and central UP generated direct and indirect employment for over 10 lakh people.
•Regional Hubs: Muzaffarnagar (the jaggery capital), Meerut, Shamli, Bijnor, Saharanpur, Bareilly, Lakhimpur Kheri, and Pilibhit.
3. Transition from Sugar Mill to Multi-Product Bio-Refinery
•The Bioeconomy Formula: Sugarcane → Sugar + Ethanol (Fuel Blending) + Bagasse (Cogeneration Power) + Press Mud (Bio-Gas / Fertilizer) + Molasses (Chemicals).
•Ethanol Blending Surge: UP is India's leading producer and supplier of ethanol for the National Biofuel Policy's E-20 (20% ethanol blending with petrol) mandate, utilizing B-heavy molasses and direct sugarcane juice.
•Compressed Bio-Gas (CBG): UP hosts 36 CBG plants, the highest in India, many co-located with sugar complexes utilising press mud (filter cake).
•Environmental & Agrarian Challenges (Mains Perspective):
•Water Intensity: Sugarcane consumes 1,500–2,500 litres of water per kg of sugar; flood irrigation in western UP exacerbates groundwater drawdown in over-exploited blocks.
•Arrears Cycle: Seasonal volatility in global sugar prices often leads to accumulated mill arrears, requiring state liquidity intervention.