Cooperative sugar factories and farmers’ organisations in Maharashtra are at loggerheads over the first advance payment to cane growers for the 2011-12 crushing season, expected to begin from October 1.
A committee, chaired by chief minister Prithviraj Chavan, has already asked factories not to pay the first advance in excess of the state’s fair and remunerative price (FRP) of Rs 1,375 per tonne.
Farmers’ organisations have threatened to take out a morcha in the third week of the month and launch a statewide agitation to press their demand of higher first advance payment.
The Federation of Cooperative Sugar Factories in Maharashtra, a representative body of over 170 mills, is expected to discuss the issue at length at its executive committee meeting scheduled to be held on Wednesday.
Sugar mills recalled that farmers’ organisations had resorted to violent agitation ahead of the 2010-11 crushing season, demanding higher first advance. Ultimately, the state government and cooperative sugar factories arrived at an understanding bypassing the chief minister-led committee’s recommendations and announced a first advance of Rs 1,800-2,000 against the FRP of Rs 1,450 per tonne. This led to serious problems for factories as sugar prices fell and many millers were unable to pay the price.
A senior state government official, who did not want to be identified, told Business Standard, “The chief minister-led committee has asked cooperative mills not to pay in excess of the FRP as first advance, with a view to avoid unnecessary competition among mills on payment of higher cane price at the cost of their finances. The government has directed the commissioner for sugar to take punitive action against those mills that are not complying with the government directive. Besides, if mills pay in excess of the FRP as first advance from the loans drawn from the Maharashtra State Cooperative Bank and district central co-operative banks, it would lead to the violation of loan provisions of the National Bank for Agriculture and Rural Development, an apex development bank.”
An office bearer of the federation said, “Against the cost of production of Rs 2,700 per quintal, the ex-mill realisation of cooperative sugar factories is Rs 2,601. Sugar mills will be burdened with the crushing of 82.5 million tonnes of cane during 2011-12, against 80.2 million tonnes in the previous season. The state is expected to have increased sugar production at 9.3 million tonnes, against 9.5 million tonnes in 2010-11,” he said.
However, a representative of the Shetkari Sanghatana contradicted the observations made by the state government and the federation. “If you combine the earnings of these mills after including the sale of byproducts such as molasses, they are earning in excess of Rs 2,700 per quintal. We will pursue our demand for a higher first advance payment and continue our agitation,” he said.
