Sugar mills to pay Rs 100 more per tonne for cane

Sugar factories in Karnataka have agreed to pay an additional cane price (ACP) of Rs 100 per tonne in addition to the statutory minimum price of Rs 811.18 per tonne crushed to farmers for supplying cane for 2007-08. The outgo for all the mills combined would work out to Rs 270 crore. Last year, mills in the state crushed around 27 million tonnes till September 2008.

At a meeting convened by state sugar minister S S Tangadagi with representatives of farmers’ organisations, mill owners and South Indian Sugar Mills Association (SISMA), here on Monday evening, many mill owners agreed to pay the additional Rs 100 per tonne as against the earlier agreed additional Rs 160 per tonne.

The farmers had demanded the payment of additional cane price considering the higher cost of cultivation. The statutory minimum price fixed by the centre was Rs 811.18 per tonne for the year.

The mills had agreed to pay the ACP of Rs 160 per tonne at a meeting called by governor Rameshwar Thakur during the President’s Rule in the state in February this year.

However, later, the factories went back on their assurance and the matter was negotiated with the present government. While, mill owners have agreed to the request of Tangadagi, SISMA has refused to accept the proposal officially, sources said.

It is learnt that individual mill owners have agreed to the minister’s proposal fearing that their licences for commencing crushing for the current season may be held back by the government.

Already, 10 of the 14 sugar mills in southern Karnataka have commenced crushing for the current season, 2008-09. Whereas mills from northern Karnataka, except Godavari Sugar Mills and Sree Renuka, are yet to give their consent to the government’s proposal. The mills in the north are waiting for commencement of cane crushing for the new year, sources said.

As regards to the payment of remaining ACP of Rs 60 per tonne, the sugar minister has not made any commitment on behalf of the government. He has promised that the government will consider the move. Some mills in south Karnataka have already started paying Rs 100 to farmers.

According to sources, the main reason for southern sugar mills to agree for making payment of additional cane price was the likely shortage of cane during the present year. As per the initial estimates, there will be a shortage of about 20 per cent in the availability of cane this year.

Some mills in southern states have also come forward to pay a cane price of Rs 1,100 per tonne (ex-factory) for 2008-09 voluntarily even as the state has not made any announcement in this regard.

A couple of mills in north Karnataka have announced to pay an even higher price of Rs 1,200 per tonne (ex-field) in addition to the cost of harvest and transportation. The farmers across the state are demanding Rs 1,500 per tonne for this year.