Mills, farmers differ over fixing cane prices in Karnataka

Farmers demand Rs 3,000 a tonne for 2013-14, a rise of 25% over the last year's price of Rs 2,400 a tonne

Sugarcane farmers and sugar mills in Karnataka are at loggerheads over fixation of the cane price for the year 2013-14. The first meeting of the newly-constituted Sugarcane Control Board, which was held here last month, failed to arrive at a consensus on the price as both sides stuck to their stand.

Farmers demand Rs 3,000 a tonne for 2013-14, a rise of 25 per cent over the last year’s price of Rs 2,400 a tonne. The state government has announced the first instalment of Rs 2,400 a tonne for the year. However, mill owners have not agreed to this price, saying it does not cover their cost of production.

Kurubur Shanthkumar, president of Karnataka Sugarcane Growers’ Association, said the farmers won’t accept anything below Rs 3,000 a tonne and would launch an agitation if the government fails to meet their demands. “The mills are making huge profits. They not only sell sugar in the open market, they are also earning from by-products like ethanol, molasses and power. We are asking them to share a fair amount of profits with the farmers,” he said.

He pointed out that the mills have announced Rs 2,900 a tonne in Uttar Pradesh and Rs 3,450 a tonne (ex-field) in Gujarat. “Even in north Karnataka, mills paid Rs 2,650 a tonne last year. So, we are asking only Rs 3,000 a tonne this year, which is a rise of 13 per cent over last year and on par with other states,” Shanthkumar added. The Centre has announced a fair and remunerative price of Rs 2,100 a tonne on the basis of 9.5 per cent recovery for the year 2013-14.

Farmers in Karnataka are demanding a uniform price of Rs 3,000 a tonne ex-field for a recovery of 9.5 per cent as first instalment and that 75 per cent of the profits earned be shared at the end of the year.

Shanthakumar said the farmers had struggled for more than five years to get the Board constituted, consequent to the enactment of the Karnataka Sugarcane (Purchase and Supply Control) Act 2013. However, there has not been a proper representation to the farmers on the Board, which is not acting in line with the interests of the farmers, he alleged.

“The cost of conversion of sugar for every tonne of cane works out to Rs 500-600 per tonne and the selling price of sugar is Rs 2,600 per quintal currently. This means, after paying Rs 3,000 per tonne of cane to farmers, the sugar mills would end up with a loss of Rs 600-800 per tonne,” said a spokesperson for South Indian Sugar Mills Association.

Sugar and Muzrai Minister Prakash B Hukkeri recently said that the Rs 2,400 a tonne purchase price fixed by the government was not the final price and this would be an initial payment to be made by the factories.

The 15-member high-level committee consisting of government officials, representatives of farmers and mills would meet shortly to fix the final price for the cane this year, he had said.

Karnataka is the third largest producer of sugar in the country with 58 mills crushing 33 million tonnes of sugarcane and produce 3.43 million tonnes of sugar annually. The average recovery in Karnataka is 10.39 per cent. Half a dozen mills in South Karnataka have started operations for the current crushing season.