Sugar mills in K'taka face cane shortage

Sugar factories in Karnataka are likely to face a severe shortage of cane this year as farmers have resorted to delay the harvest of the crop for the season 2008-09.

The farmers have also threatened to divert the cane to jaggery making, following the delay in payment of cane arrears by the mills amounting to Rs 460 crore.

In addition to this, the decline in sugarcane output during the current sugarcane year (October-September) is expected to add to the woes of the sugar mills.

The cane production in the state is estimated to have come down by around 40 per cent to 30 million tonnes during the current year 2008-09. The acreage under sugarcane has dropped by about 50 per cent to 3.5 million acres this year.

Following the agitation by farmers, sugar mills in southern Karnataka have deferred the sugar crushing to the first week of September. Normally, mills in south India start crushing in the month of July-August.

Farmers in Karnataka have been waiting for the payment of additional cane price of Rs 160 per tonne agreed by sugar mills, early this year, for the last sugar season. However, the factories have come forward to pay the arrears in two installments of Rs 100 and Rs 60. The proposal is rejected by the farmers.

Kurubur Shanthakumar, President, Sugarcane Growers’ Association said, “The farmers are fed up with the delay in payment of cane arrears by the factories. We have been asking the state government to hasten the process of fixing the additional cane price for the new season. We are not ready to accept part payment of cane arrears (Additional Cane Price) by the factories. They should pay in one instalment otherwise we will not supply cane to them for this year.”

The farmers are demanding the state government to fix the state advisory price at Rs 1,550 per tonne for the current year. The Centre has fixed the statutory minimum price at Rs 811 per tonne for a recovery of 9 per cent for the current year

“Factories are making enough profits through many ways. Apart from sugar, they are making extra profits by selling molasses, power through cogeneration units. So they should pay higher amount to farmers who are incurring close to Rs 1,500 to grow one tonne of sugarcane,” he said.

Molasses prices have gone up by over five times to Rs 4,500 per tonne in 2008 compared to the previous year, while the mills are selling power at Rs 8.25 per unit compared to Rs 3.25 per unit last year, a growth of over 150 per cent. Sugar prices have nearly doubled to Rs 2,000 per quintal in 2008 compared to the previous year, he said.

Shanthakumar said if the factories fail to pay up the arrears immediately in one instalment, the farmers will divert their produce to jaggery making as it would be more remunerative than supplying cane to mills.

Currently, jaggery prices have been ruling at Rs 2,000-2,500 per quintal. Farmers can save upto Rs 1,700 per quintal by supplying cane to jaggery units, he said.

The farmers will decide on the next course of their action after the return of chief minister B S Yeddyurappa from the US this week, he added.