Mills fail to fix uniform sugarcane price

Even as the mills fail to arrive at a consensus on fixing uniform sugarcane price being paid to farmers in Karnataka, many sugar mills in southern parts of the state have commenced cane crushing for the new season beginning October 2008.

Out of 14 sugar mills in south Karnataka, four have commenced crushing. They are Bannari Amman Sugars, Pandavapura cooperative sugar factory, which is taken over by Kothari Sugars, NSL (formerly SCM), Coromandel sugar mills (ICL).

While two others, Ambika Sugar and Hemavathy Sugar factory, are likely to start crushing very soon. All these mills have agreed to pay higher cane price of Rs 1,100 per tonne, a 35 per cent rise over the last year price.

At a meeting organised by South Indian Sugar Mills Association (SISMA), here on Monday (September 15), mills failed to arrive at a consensus on fixing the uniform cane price for the season 2008-09.

Many mills have declined to pay higher cane price, while some have agreed to consider by December this year. Particularly, mills in north Karnataka are yet to agree on the price for the new year.

“The statutory minimum price for the year has been fixed at Rs 811 per tonne for 9 per cent recovery. While the maximum amount works out to Rs 950 per tonne, the mills have agreed to pay Rs 1,100 per tonne. This price, however, is not fixed by the state government. It is the price that is arrived at after mutual discussion with the cane growers by these mills,” SISMA sources told Business Standard.

Sources, further, said the higher price is being given only to ensure that the mills get adequate supply of cane this year. It is estimated that sugar mills in Karnataka are likely to face a cane shortage of the order of over 20 per cent for 2008-09. Last year, sugar mills in the state crushed around 270 lakh tonnes.

As regards to payment of Rs 160 per tonne additional cane price, as agreed by the mills early this year at a meeting with the state governor Rameshwar Thakur, the mills have changed their stance and have decided to pay only Rs 100 per tonne, sources said. While, some of the mills like Mysugar, Nandi, Malaprabha have already paid Rs 160 to the farmers.

SISMA members have decided to meet the state sugar minister again later this month to convince the state government to pay the balance Rs 60 to the farmers.

They also want the government to prevent farmers from diverting their crop to jaggery making.