New Delhi, Nov. 20: The Manmohan Singh government scored the first rollback of its second avatar today by squelching an order on sugarcane price that had brought thousands of angry farmers to Delhi and united Opposition parties.

The sugarcane (control) order 2009 will now be amended to restore the provision that mill owners have to pay growers the price that a state announces.

Under an ordinance the Centre had issued last month, a ceiling price was fixed for sugarcane. If a state announced a price above this, the difference would have to be borne by it and not by mill owners.

Farmers descended on the capital yesterday in protest against the ordinance that also acted as a spur to Opposition parties in utter disarray to rally together.

Unnerved by the intensity of the protests, the government backed off in double quick time, announcing the rollback at an all-party meeting today.

Rashtriya Lok Dal leader Ajit Singh, who had organised the farmers’ demonstration, said their main demand for restoring the state advised price (SAP) had been fulfilled. Leaders of the BJP, Left and Samajwadi Party also expressed satisfaction.

Within hours of a united Opposition paralysing both Houses for the second consecutive day, the government changed its earlier plan to discuss the issue on Monday.

Constituents of the United Progressive Alliance gathered at the initiative of finance minister Pranab Mukherjee after Parliament adjourned. This was followed by the all-party meeting.

Monday’s scheduled breakfast meeting at Mukherjee’s residence will also take place. There the government will inform the Opposition about the bill that will replace the order on sugarcane pricing.

The ordinance was issued to ostensibly discourage states from indulging in the populist practice of raising cane prices almost in competition with each other, creating upward pressure on sugar prices that have gone through the roof lately. They are expected to rise further in the coming months.

That apparent economic rationale stood defeated today in the face of political pressure. The backtracking is of a piece with the first UPA government’s rollback of the banking cash transaction tax and partial withdrawal of the securities transaction tax. A plan to divest 10 per cent from Neyveli Lignite was dropped under DMK pressure.

Parliamentary affairs minister Pawan Bansal released a statement asserting that the sugar mills will have to pay the farmers the price fixed by the state.

He said: “Clause 3 in the sugarcane (control) order, which provided that the difference between the SAP and the FRP will be paid by the state governments, has been deleted as it caused some misgivings among the farmers.”

The government’s pro-farmer credentials may not have suffered long-term damage from this controversy but it has placed the ruling combine on the defensive at the start of the winter session.

A minister, however, said: “We acted fast, resolving the issue in 25-30 hours, and managed some damage control on the very first day by highlighting Rahul Gandhi’s meeting with the Prime Minister.”