The Supreme Court on Friday sought the central government's response on a plea by sugarcane farmers association seeking the implementation of the Commission for Agriculture Cost and Prices' (CACP) report for 2015-16 and a price stabilisation fund.
A bench of Chief Justice H.L.Dattu, Justice S.A.Bobde and Justice Amitava Roy, while issuing notice, appreciated the serious issue being raised in a public interest suit and also referred to the newspaper reports on the spate of suicide by the sugarcane-growing farmers.
The CACP has recommended fixing sugar price on basis of fair and remunerative price to revenue sharing formula, whichever is higher, and the establishment of Sugar Stabilisation Fund so that farmers are paid their dues within reasonable time.
It also urged the government to take measure to cover the gap between cane price fixed by the government and the actual price which sugar mills are able to pay.
Senior counsel Rakesh Dwivedi appearing for the petitioner, the Consortium of Indian Farmers Associations (CIFA), drew the attention of the serious crisis that sugarcane farmers were passing through, resulting many of them in financial distress committing suicide.
The CIFA has also sought directions to the government to implement CACP recommendation to create a price stabilisation fund to meet the situations when sugar prices are in slide and sugar mill owners are unable to pay the farmers the price of their produce as it sought a lasting solution of the "chronic problem" that sugarcane farmers faced on year to year basis.
It contended that it was incumbent upon the government to ensure that sugarcane farmers get their full payments of FRP by "strictly enforcing the revenue sharing formula on the sugar mills and whenever same is below FRP, then meeting the shortfall out of the central fund as suggested by the CACP".
The CACP has recommended for creating such a fund by levying a cess on sugar.
Saying the cess would help to bail out sugarcane farmers when in distress on account of price instability, the CIFA has said that levying a cess of Rs.4 to Rs.5 per kilogram would generate a fund of Rs.10,000 to Rs.12,500 crore that could be used in difficult situations.
Referring to the glut in the domestic and international market, it expressed apprehensions that this year the sugar mills may not even get last years "average ex-mill price" as the domestic sugar prices in the current financial year may not cross current rate of Rs.2,500 per quintal.
If that happens, then sugar mills would not be able to pay the basic remunerative cane price to the farmers, it warned, adding that this meant that not only the current arrears (Rs.15,000 crore) would not get fully cleared but it would be further compounded with fresh arrears for the current financial year.
Citing newspaper reports of farmers ending their lives because of unbearable financial burden, the CIFA in its petition has said that "a due to steep fall in sugar prices and accumulated stocks, the entire sugar sector is on the verge of collapse" and "due to financial crunch and losses incurred by the sugar factories during the last couple of years, over 30 percent of the factories are likely to stop crushing during 2015-16"..
Describing the current situation as "volcanic", the CIFA has said that if government did not take corrective steps well in time it would leave the sugarcane farmers "high and dry, affecting their lives in carrying on their day to day activities" and will force them to embrace death out of depression and desperation.
