Relief package fails to cheer sugarcane growers

Wanting to bail out the sugar industry which hit by a slump in prices and the non-increasing crushing capacity of sugar factories, the Karnataka government on Monday announced a financial relief package to sugarcane growers.

Prominent features of the package include a directive to the sugar mills to pay sugarcane growers an additional sum of Rs 125 per tonne over and above the statutory minimum price fixed by the Union government for the cane crushed during 2007-08.

"The hardship faced by cane growers has been engaging the attention of the government for some time now. The situation has come about as a result of excess sugar production and lesser quantities of sugar sales at rates lower than anticipated,'' said Commerce and Industry Secretary Arvind G Risbud while reasoning the announcement of the package.

The decision to give an additional Rs 125 per tonne of sugarcane will aid the growers tide over the crisis that is looming large, government officials argued.

The Union government had fixed a minimum support price of Rs 811 per tonne and from now onwards, growers will now get Rs 936 per tonne, with this announcement.

This apart, the state government had agreed to release an initial amount of Rs 7 crore towards the payment of a compensation of Rs 25,000 per hectare for cane that is left uncrushed.

This comes in the backdrop of farmers abandoning sugarcane in the fields after factories announced that crushing activities will be temporarily stopped because of a glut in production.

The government has also agreed to pay a transport subsidy of Rs 2 per tonne per km (beyond 50 km) both within and outside the state to facilitate crushing of unregistered cane by other mills.

"The government will also try to improve the liquidity of sugar factories to enable them clear cane price arrears of the past year as well as price to be paid for the present year by operationalising the existing Union government scheme of extending financial assistance to sugar factories,'' Risbud added.

However, the government's sops have not been welcomed by the growers. Sugarcane Growers Association president K Shanthkumar said: "We have been demanding an additional amount of Rs 200 per tonne over and above the minimum support price. We expected some sweet news from the government, but the Rs 125 per tonne announced has turned out to be bitter.''

The growers have decided to announce their next course of action in the next three days.