Fed up with the non-remunerative cane prices paid by sugar mills in the state, sugarcane growers in Karnataka have demanded that the state government introduce state advisory price (SAP) mechanism for their produce. Karnataka Sugarcane Growers’ Association today met chief minister B S Yeddyurappa and urged him to speed up the introduction of SAP Act in the state to help growers.
In 2004, the Supreme Court had given a direction to all state governments to introduce SAP mechanism to help growers. Subsequently, states like Uttar Pradesh, Haryana and Tamil Nadu have introduced SAP for sugarcane growers.
According to Kurubur Shanthkumar, president, Karnataka Sugarcane Growers’ Association, SAP mechanism will enable the state government to fix the sugarcane price over and above the statutory minimum price (SMP) fixed by the Centre every year.
SAP, fixed by the state government, will be remunerative and it is in the best interests of cane growers and sugar mills. It ensures that growers recover their cost of production.
“Due to the absence of SAP in Karnataka, the sugarcane growers have been deprived of scientifically fixed cane price and as a result are suffering huge losses every year. This year, large amount of cane is likely to be diverted to jaggery making as the farmers are not in a position to bear any more losses,” he said.
The SAP Act will empower the state government to fix the cane price to be paid by sugar mills to cane growers.
Besides the market rates of agricultural inputs, the state governments consider all factors like cost of production of sugarcane, return from alternative crops, labour, rental value of land and interest on working capital while fixing SAP of sugarcane for a season.
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On the other hand, the Centre fixes the statutory minimum price (SMP) of sugarcane under the provisions of clause 3 of Sugarcane (Control) Order, 1966. The SMP is linked with the percentage of sugar recovered.
While fixing the SMP of sugarcane, the cost of production and return to the growers from other alternative crops, as well as general trends of prices of agricultural commodities and inputs need to be kept in view in the future.
As a matter of fact, the SMP for sugarcane fixed by the Centre is generally not remunerative to farmers, Shanthkumar said.
Currently, in Karnataka there is no SAP and the mills have been following a different pricing mechanism in different parts of the state as agreed with the farmers.
In the meanwhile, the association has urged the chief minister to fix cane price for the current sugar season beginning October 2008. Currently, many sugar factories in the state have announced a price in the range of Rs 1,100-1,250 per tonne.
The growers’ association has also urged the state government to speed up the process of payment of additional cane price of Rs 160 per tonne for the year 2007-08.
As agreed by the sugar mills at a meeting with the governor Rameshwar Thakur in February this year, some of the mills have paid Rs 100 per tonne to farmers, while many others have not paid as yet.
The total amount of pending arrears amounts to Rs 200 crore for the year, Shanthkumar said.
“If the government fails to take proper action in this regard then the farmers will go on a dharna in front of chief minister’s house on November 20,” he said.