A battle is brewing between Maharashtra sugar factories and farmer organisations. The aggressive farmer organisation, Swabhimani Shetkari Sanghatana (SSS), has demanded a first cane installment of Rs 3,400 per tonne for the crushing season of 2017-18, a demand that has not gone down well with sugar millers in the state.
The Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) has said millers have decided to give the first cane payment to farmers as per the Fair and Remunerative Price ( FRP) decided by the Centre. “ Meeting this demand for such a high payment is possible only for factories in Kolhapur where Raju Shetti of SSS comes from. Mills in this region have a high recovery of 12.5 to 12.75% as a result of which mills end up producing Rs 120 to Rs 125 kg per tonne of cane while mills in other parts of the state have poor recoveries,” Shivajirao Nagawade, chairman of the cooperative federation said. Though the Centre has already announced a Fair and Remunerative Price, raising it by 10.6% over previous year’s Rs 2,300 per tonne to Rs 2,550 per tonne, each state government can decide its own sugarcane price over and above FRP.
Rohit Pawar, vice-president, Western India Sugar Mills Association (WISMA) agreed and said that it will be possible for mills to make the first cane installment payment as per the FRP as decided by the Centre. “ Market sentiment is down and there is no demand for sugar. Diwali has been pretty bad for the market and therefore millers will not be in a position to give a high first cane payment,” he said. Last year factories and farmer organisations had decided on giving Rs 175 per tonne over and above the FRP. This year, the Centre has increased the FRP by Rs 300 per tonne.Most mills offer a minimum of Rs 2,400 per tonne and maximum of Rs 2,900 per tonne and banks offer an 85% pledge amount on the sugar produced by these mills, industry sources said. This year, Karnataka has offered a first cane installment of Rs 3,000 per tonne and cane in the border areas is being transported to these mills leading to a concern about possible shortage of cane in some parts of the state, industry observers said.
In Maharashtra, Shetti has asked farmers not to sell their cane in haste to factories and wait for a good price because of this possible shortage in supply and unless a decision is taken on the first cane installment to be given to farmers. The Sanghatana has also threatened to stop vehicles from transporting cane to factories and get violent in case their demands are not met. Nagawade however pointed out that this has been the case for the past few years when farmer organisations have been getting violent on this issue. They forget that they cannot treat all the factories in the same manner since recoveries in other factories is not as high, he said. Pawar pointed out that samples of cane taken by mills prior to cane cutting have shown high recoveries of more than 10%. Therefore the overall sugar production in the state is good although the demand is low. Mills must understand that mills have their interests at heart and have made cane payments in the past even by taking loans, he said. He said most mills in western Maharashtra had paid Rs 200-250 per tonne during Diwali and as and when the mills get money, they will continue to make payments to farmers, he said.