Cane suppliers to private sugar mills seek compensation from TN govt

Having settled for a compromise on sugarcane payments with private mills, farmers in Tamil Nadu are demanding that the State government make good the loss of the last four years.

It is the government that announced a recommendatory State Advised Price for the four years since 2013-14 over and above the mandatory Fair and Remunerative Price announced by the Centre.

The private sector sugar mills had categorically declined to pay this price as it was unviable in the context of low sugar prices, point out farmers’ representatives.

Also, farmers supplying sugarcane to co-operative and public sector mills are being paid SAP. These mills are chronically cash-strapped and the State government has been supporting them financially, they point out.

Farmers are claiming a total of over ₹1,500 crore in SAP dues for the four years. Following the compromise arrived at earlier this month, they will get over ₹200 crore from private mills. This is more than what the mills had committed to pay while procuring cane.

The mills are making the payment on the condition that the State government will not announce SAP in the coming seasons.

RV Giri, National President, Consortium of Indian Farmers Associations, says the State government will now have to compensate the farmers the balance SAP. The discrimination in payments between farmers supplying to private sector mills and to co-operative and public sector mills is unfair.

The South Indian Sugar Mills Association – Tamil Nadu has been demanding a shift to revenue-sharing formula based on prices of sugar and by products. Any higher price will have to be compensated by the State government.

During the first week of January, following discussions between farmers, the Association and the government representatives led by the Industry Minister KT Thangamani, the government had declined to bear any part of the over due claimed by farmers.

It had left it to the mills to compensate the farmers based on mill-wise negotiations. The private mills are shelling out about ₹40 a tonne a season, totalling ₹160 a tonne of cane for the four years totalling about ₹200 crore. Resolving this issue is crucial to farmers planting cane, says Giri.

Over the years, sugarcane planting had steadily declined in the State due to drought.

In the current season sugar mills expect to produce about six lakh tonnes of sugar. This is just about 20-25 per cent of the established production capacity.

Mills had hoped cane planting would pick in the current season following the North-East monsoon to meet the requirement for 2018-19.

But with an estimated 15-20 per cent overall deficit and much higher in the western parts of Tamil Nadu cane planting lacks lustre.

Not much increase can be expected in the coming season as of now, say industry sources.