Karnataka sets July 31 deadline for paying sugarcane dues

Bowing to pressure from debt-ridden farmers and opposition lawmakers, a defensive Karnataka government on Tuesday decided to ensure sugarcane growers were paid their dues by July 31.

"We have set July 31 as the new deadline for sugar mills to pay the dues they owe to cane farmers over the last two fiscals (2013-14 and 2014-15)," state Cooperation Minister H.S. Mahadeva Prasad said in the legislative assembly here amid uproar.

The state legislature's 10-day monsoon session began on Monday in this northern city, about 510 km from Bengaluru.

For various reasons, including production glut and falling prices in domestic and overseas markets, sugar mills in the state did not fully pay growers, resulting in Rs.923 crore dues in fiscal 2013-14 and Rs.2,120 crore dues in fiscal 2014-15 to growers who delivered their cane to mills for crushing.

"Our department will pay the Rs.200 per tonne support price to growers in two installments of Rs.100 each on July 10 and July 31 from proceeds of auctioning sugar stocks being seized from defaulting mill owners," Prasad said.

A dissatisfied opposition, however, rejected the extended deadline and urged the ruling Congress to make mills pay at the earliest, as the central government had recently granted Rs.6,000 crore interest-free loans to mills across the country for clearing arrears and preventing farmers from taking their lives.

"The government has failed to resolve the debt crisis of farmers growing agricultural or commercial crops by raising loans but not able to clear them due to poor returns. Was the government waiting for more farmers to commit suicide?" thundered Janata Dal-Secular (JD-S) lawmaker and former chief minister H.D. Kumaraswamy, and staged a walkout with his party's other lawmakers.

Opposition leader and BJP's former chief minister Jagadeesh Shettar staged a sit-in near the speaker's podium along with his party's dozen members and urged the government to pay full arrears at one time and at once.

"The state government is helpless before owners of sugar mills as many of them are ruling Congress members and some are even cabinet ministers. The government is more interested in protecting the interests of mill owners than preventing debt-ridden farmers from committing suicides," Shettar alleged.

In a related development, hundreds of farmers, including cane growers, threatened to intensify their agitation if the state government did not pay their dues by this week and recover them from mills instead of making the debt-ridden among them resort to the extreme step of committing suicide.

"The state government, especially Chief Minister Siddaramaiah, who claims to be a farmer, should come to our rescue in this hour of distress, as farming has become risky and non-remunerative due to rising input costs but not commensurate prices to sustain," state farmers' body president and lawmaker Kodihalli Chandrashekar told reporters.

About 400 farmers were arrested under the Karnataka Police Act for blocking the Pune-Bengaluru national highway near the assembly building.

The state government had assured cane growers of paying Rs.2,500 per tonne with Rs.150 per tonne incentive in previous fiscal (2013-14) and Rs.2,200 per tonne in last fiscal (2014-15) at 9.5 percent recovery.

In the legislative council, opposition leader and former BJP deputy chief minister K. Eshwarappa said the state government should pay arrears to debt-ridden farmers this week, as it had already seized 7.8 lakh tonnes of sugar from factories across the state.

"The government can raise Rs.1,575 crore by selling sugar at Rs.20 per kg and start paying dues to distressed cane growers," Eshwarappa said.