Cane growers go unpaid by sugar mills in Karnataka

Karnataka sugar millers are in a bind: falling prices because of rising production make it difficult for them to sell the commodity, resulting in payments to cane growers being withheld.

“There are no takers for sugar even at ₹2,500 per quintal,” said Pavan Kumar, Vice-President of Coromandel Sugars and President of the South India Sugar Mills Association (SISMA) Karnataka chapter.

At current prices, it is not even feasible to pay the fair and remunerative price (FRP) ₹220 per quintal for 9.5 per cent recovery as announced by the Centre.

“Unless the Government intervenes and provides financial support, it is difficult to make the payments,” Kumar said.

Millers in Karnataka, the third largest sugar producing State, owe close to ₹1,900 crore in arrears for the 2013-14 season to growers in the state.

Karnataka Chief Minister Siddaramiah has convened a meeting with the sugar industry on Saturday to discuss the cane payment issue.

The situation of farmers is pathetic with mills refusing to make the payments, said Kurubur Shantakumar, President of the Cane Growers’ Association.

While mills in North Karnataka have not made any payments for the current season so far, mills in the South have stopped making payments for the past month, Shantkumar said.

However, SISMA’s Pavan Kumar claimed that eight mills in South Karnataka have been making the payment of ₹220.

Kumar said the Government should look at creating a buffer stock of sugar, hike import duty and announce subsidy for exports, to help stabilise prices.

Recently, sugar mills in Uttar Pradesh also expressed their inability to pay the FRP to the farmers considering poor demand for sugar amidst low prices.

Till mid-December, sugar production was up 47 per cent at 42.35 lakh tonnes as against 28.85 lakh tonnes in the corresponding period last year.

The Indian Sugar Mills Association recently said that rising production was putting pressure on prices and ex-mill prices have been falling daily between ₹10 and ₹40 a quintal. The domestic consumption of sugar is pegged at 247 lakh tonnes, while the production for the 2014-15 season is estimated to be between 250 and 255 lakh tonnes.