Sugar mills, farmers differ over fixing cane price in Karnataka

Mill owners don't to Rs 3,000 per tonne price on ground that it does not cover their cost of production

Sugarcane farmers and sugar mills are at loggerheads over the fixation of cane price in Karnataka for the year 2013-14. First meeting of the newly constituted sugarcane control board, whi ch was held here last month failed to arrive at a consensus on the cane price as both representatives mill owners and farmers’ body stuck to their stand.

Farmers are demanding Rs 3,000 per tonne for the year 2013-14, a rise of 25% over the last year’s price of Rs 2,400 per tonne. The state government has announced a first installment of Rs 2,400 per tonne for the year. However, mill owners have not agreed to this price on the grounds that it does not cover their cost of production.

According to Kurubur Shanthkumar, president of Karnataka Sugarcane Growers’ Association, the farmers are not willing to accept anything below Rs 3,000 per tonne and would launch an agitation if the government fails to meet their demands. “The mills are making huge profits by not only selling sugar in the open market, but they are also earning from the by-products like ethanol, molasses and power. We are asking them to share a fair amount of profits with the farmers,” he said.

“The mills have announced Rs 2,900 per tonne in Uttar Pradesh, Rs 3,450 per tonne (ex-field) in Gujarat. Even in north Karnataka mills paid Rs 2,650 per tonne last year. So, we are asking only Rs 3,000 per tonne this year, which is a rise of 13% over last year and on par with other states,” Shanthkumar said.

The Central government has announced a fair and remunerative price (FRP) of Rs 2,100 per tonne on the basis of 9.5% recovery for the year 2013-14.

The farmers in Karnataka are demanding a uniform price of Rs 3,000 per tonne ex-field for a recovery of 9.5% as first installment and share 75% of the profits earned at the end of the year.

Shanthakumar said the farmers had struggled for more than five years to get the board constituted consequent to the enactment of the Karnataka Sugarcane (Purchase and Supply Control) Act 2013. However, there has not been a proper representation to the farmers on the board. Also, the board is not acting in line with the interests of the farmers, he alleged.

“The cost of conversion of sugar for every tonne of cane works out to Rs 500-600 per tonne and the selling price of sugar is Rs 2,600 per quintal currently. This means after paying Rs 3,000 per tonne of cane to farmers, the sugar mills would end up with a loss of Rs 600-800 per tonne,” a spokesperson for South Indian Sugar Mills Association (SISMA) said.

Sugar and Muzrai Minister Prakash B Hukkeri recently said that a purchase price of Rs 2,400 per tonne fixed for sugarcane this year by the government was not the final price and this would be an initial payment to be made by factories.

The 15-member high-level committee consisting of government officials, representatives of farmers and mills would meet shortly to fix the final price for the cane this year, he said.

Karnataka is the third largest producer of sugar in the country with 58 mills crushing 33 million tonnes of sugarcane and produce 3.43 million tonnes of sugar annually. The average recovery in Karnataka is 10.39%. For the current crushing season, half a dozen mills in South Karnataka have started operations.