The Uttar Pradesh government has increased the State Advised Price (SAP) for sugarcane by ₹30 per quintal for the 2025-26 crushing season. The new price is ₹400 for early-maturing varieties and ₹390 for general kinds. In light of UP’s position as India’s leading producer of sugarcane, this action, which state officials have called historic, intends to increase farmers’ incomes by an estimated ₹3,000 crore. It does, however, cause worry for sugar mills that must contend with increased expenses in a cutthroat market.
Announcement Breakdown
On October 28, 2025, the UP cabinet authorised the SAP increase, which is the fourth such change during the current administration and the largest since 2017. The price increases from ₹360 to ₹390 per quintal for the general category and from ₹370 to ₹400 per quintal for premium types that mature early. This 8%+ increase will help almost 46 lakh farmers in the state during the October 2025–September 2026 season.
The last significant raise was made in 2023 ahead of national polls, and this one was made ahead of the 2027 state elections, following a pattern of pre-election timing. Along with programmes like online sugarcane slip systems to eliminate middlemen, government infrastructure measures, such as four new mills, six restarts, and extensions in 42 units, have increased crushing capacity comparable to eight large mills.
Historical SAP Trends in UP
UP’s SAP has gradually increased over the last ten years in response to political cycles and production prices, reflecting the state’s supremacy in sugarcane, with the area under cultivation growing by almost 50% in the 2010s. SAP raised prices by ₹25–30 in 2021–2022, from ₹315 to ₹340 for popular kinds and ₹325 to ₹350 for early ones. Despite an 8% FRP increase to cover mills’ dues and prioritise industry relief, there was no adjustment made in 2024–2025.
SAP for general varieties increased from about ₹310 to ₹360 between 2015–16 and 2024–25, frequently surpassing the central FRP by ₹50–100 to offer additional farmer support. Yield changes owing to weather and technology adoption led production increase, with overall output rising from 132 million tonnes in 2012-13 to over 134 million by 2013-14 and continuing to rise. The increase this year is in response to a 15-20% increase in labour, fertiliser, and pesticide costs since 2023.
FRP vs SAP: National Context
In order to guarantee higher compensation, UP’s SAP surpasses the central Fair and Remunerative Price (FRP) for 2025–2026 by ₹75–85. The FRP is set at a base of ₹315 per quintal for 10% recovery, up 8% from previous seasons. Based on CACP suggestions, the Cabinet Committee on Economic Affairs established FRP, which consists of deductions below 10% and premiums for higher recovery (₹3.15 per 0.1% above 10%).
States like Maharashtra, Punjab, and Haryana similarly set SAP above FRP (Punjab set it at ₹360 for mid-varieties in 2021–2022), sparking discussions about how dual pricing distorts markets and results in arrears. Higher state prices put pressure on mills without MSP adjustments for sugar; hence, CACP calls on states to terminate SAP or finance the difference through direct benefit transfers. Premium cultivation is discouraged in UP due to the small ₹10 difference between early and general types.
Impacts on Farmers and Mills
For farmers, the boost provides stability in a state that produces more than half of India’s ethanol and leads in sugar output, potentially encouraging new acreage and better varieties such as Co 0238. Despite the ₹390 SAP and claims of ₹3,000 crore additional revenue, production expenses in areas like Shamli average ₹416/quintal, leaving narrow margins. It is deemed inadequate by opposition parties, who attribute it to electoral politics rather than actual cost covering.
Due to low recovery rates and surplus stockpiles from limited ethanol diversion (3.4 million tonnes vs. 5 million anticipated), sugar mills are facing squeezed margins as procurement prices increase to ₹42–43 per kilogramme of sugar. Industry organisations like ISMA applaud the initiative but demand ethanol repairs and MSP increases to ₹40/kg, citing payment delays and viability concerns. The strategy might steady the supply of cane, but it would also raise input costs throughout the supply chain, which would impact producers of demerara and jaggery who depend on UP sourcing.
Overall, the UP government’s bold SAP move underscores its pro-farmer stance, yet balancing industry pressures remains key for sustainable growth in this vital sector.
