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Sugarcane (Control) Order, 1966 provides for price(SMP) for sugarcane purchased by sugar mills during each sugar season (Clause 3), payment of interest at 15% per annum on amounts due beyond 14 days of delivery of sugarcane at factory gate (Clause 3(3-A), payment of additional cane price to the growers (Clause 5-A) regulation of distribution and movement of sugarcane (Clause 6), licensing of power crushers and khandsari units and regulation, issue of directions to producers of khandsari sugar (Clause - 8), power to call for information etc. from producers (Clause - 9) power to entry, search and seizure (Clause 9-A) and delegation of powers conferred by the Sugar (Control) Order, 1966 to any officer or authority of the Central or State Government.

Synopsis- Sugarcane (Control) Order 1966 (As amended on 9-9-1983)

The important provisions contained in this Order are summarised below:-

Criteria for determination of SMP: Clause 3(1) & 3(2) deal with fixation of the Statutory Minimum Price having regard to five criteria, viz. –

  1. cost of production of sugarcane;
  2. return to grower from alternative crops and the general trend of prices of agricultural commodities;
  3. availability of sugar to the consumer at a fair price;
  4. the price at which sugar produced from sugarcane is sold by the producer of sugar; and
  5. the recovery of sugar from sugarcane.

Time stipulation for payment of cane price: Clause 3(3) deals with fixation of 14 days period for making payment for sugarcane delivered at factory gate or at cane collection center.

Interest liability on delayed payments: Clause 3(3-A) provides for interest liability on payments delayed beyond 14 days of delivery of sugarcane at 15% per annum.

Unpaid/unclaimed cane price: Clause 3(7) deals with deposits to be made with the District Collector, within three months of close of a sugar year, amounts of cane price unpaid or lying unclaimed with the factory on the last day of the sugar year.

Rates of cane price: Clause 3A provides for payment of sugarcane price either at the rates of SMP notified by the Central Government or at the "agreed price" ( i.e. the price agreed between the producer and the cane grower).

Minimum Price for khandsari: Clause 4 deals with fixations of minimum price for khandsari sugar at a rate not exceeding the SMP fixed by Central Government for cane supplies made to sugar factories in the region, and prohibits sale or purchase of cane at a price lower than that fixed for khandsari sugar producer under this clause.

Additional cane price: Clause 5-A provides for payment of additional cane price in accordance with the formula contained in the Second Schedule to the Sugarcane (Control) Order, 1966. This formula (generally referred to as "the Bhargava Formula") is meant to enable the farmer to get a remunerative price for the cane supplied after 1-10-1974, by sharing the profits arising out of excess realisation with the producer sugar factory.

Intimation to producers / growers, regarding additional cane price: Clause 5-A(2) provides for intimation in writing to the producer of sugar and the cane grower connected with the supply of sugarcane regarding the additional cane price determined.

Appeals against determination of additional cane price: Clause 5-A(3) deals with appeal against the additional price determination and provides for a period of 30 days from the date of communication in this regard for appeal by the aggrieved party, with power to the Government will be final.

Restriction of supply of fixed percentage of cane produced: Clause 5-A(7) deals with restriction on the cane grower to supply not less than 85% of sugarcane agreed to be supplied by him, and if subjected to any penalty for failure to supply 85% of cane, deprives him of the entitlement to additional cane price.

Reservation of cane area: Clause 6 deals with the power of Government to regulate distribution and movement of sugarcane such as fixation of "reserved area" for a sugar factory, grower, directing the cane supplier and sugar factory to enter into an agreement, prohibiting or restricting the export of sugarcane from any area without a permit etc.

Licensing of khandsari units: Clause 7 deals with power to license power crushers, khandsari units and crushers to regulate purchase of sugarcane.

Delegation of powers: Clause 11 deals with the delegation of powers to any authority of the Central/State Government.

State legislations relating to enforcement of payment of cane price: There are various State legislations regarding enforcement of payment of sugarcane price to growers. In Uttar Pradesh, the U.P. Cane (Regulation of Supply and Purchase) Act, 1953, contains provisions for tagging a percentage of advances given by banks for payment of cane price, together with interest thereon, by the Collector, on the basis of recovery certificate issued by the Cane Commissioner, as if it were an arrear of land revenue. Similar provisions also exist in State legislations of Madhya Pradesh, Andhra Pradesh, Bihar and Tamilnadu and contain provisions for penalties for contravention, which include fines and imprisonment.

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