Sugar protest forces Parliament to shut

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Thousands of farmers protesting low state-controlled sugarcane prices forced the postponement of the first day of the parliamentary winter session on Thursday, highlighting rural discontent over government policy.

Some 5,000 farmers from Uttar Pradesh, India's biggest cane producing state, marched to the opening of the parliament to demand higher state-set prices for sugarcane.

Parts of the capital was disrupted by the protests, that were backed by opposition parties.

The Congress-led coalition won re-election with a stronger mandate in May, raising hopes of quick reforms, but it has moved slowly and is still answerable to a reform-shy rural base. It faces political opposition to rapid change and deregulation as protests on Thursday highlighted.

The government has given the states greater autonomy in fixing sugarcane prices, one of India's biggest cash crops, in order to lift restrictions on a heavily-regulated sugar sector.

But many farmers are unhappy with those state-set prices, saying they benefit sugar firms.

The government has set a series of reforms ranging from the financial sector to law and order and gender equality as priorities for the winter parliament session.

Investors are following whether Prime Minister Manmohan Singh will follow up on his pledge to push ahead with difficult financial reforms, particularly in the insurance and pension sectors.

The state government has fixed the price the mills must pay to farmers at Rs 165-170 (USD 3.55-USD 3.66) per 100 kg, and farmers have been seeking a higher price that corresponds more to the rise in retail prices.

"We demand at least Rs 215 as the cane price," Anil Singh, national secretary of the National Alliance of Farmers' Associations, told Reuters.

Sugar output in Uttar Pradesh is likely to fall below estimates as the weakest monsoon in more than three decades has hit sucrose content in cane.