Indian sugar mills association

Not sweet enough

Date:	03 Jun 2013

Source:	The Tribune

Reporter:	Editorial

News ID:	2302

Pdf:
Nlink:

Sugar mills should pay farmers more THE Punjab government has announced an increase of Rs 40 a quintal in the sugarcane prices for the 2013-14 crushing season. The procurement prices, which will range between Rs 290 and Rs 275 a quintal, have been immediately rejected as inadequate by the Bharatiya Kisan Union. There is a dichotomy between the cost of production of agricultural commodities and procurement prices announced by governments. Since diesel prices are being incrementally raised, the cost of production is on the rise. The true cost of water and labour is seldom adequately factored in. The M.S. Swaminathan committee’s suggestion of a 50 per cent profit margin for farmers on each crop has remained unimplemented, resulting in disenchantment among farmers. There are 688-odd sugar mills in the public, private and cooperative sectors in the country. Many are on the verge of closure due to poor profitability and the seasonal nature of business. Mill owners say since farmers are a major vote bank, politicians fix high prices for sugarcane. Until recently, they were forced to sell a part of their sugar at subsidised rates to the government for the public distribution system. In April, the government partially decontrolled the Rs 80,000-crore sugar industry, allowing the mills the freedom to sell their produce in the open market with no obligation towards the government. For the PDS requirements the Centre will reimburse the states the difference in the PDS and retail prices subject to a maximum of Rs 32 a kg for two years. Accepting the recommendations of the Rangarajan Committee, the Centre has left to the states the issues of sugarcane pricing, the bonding of farmers with specific mills and abolition of cane area regulation. The mills are the obvious gainers and they should now clear farmers’ arrears. They should also implement the Rangarajan committee’s suggestion to pay farmers a 70 per cent share of the value of sugar and its byproducts. To make the sector viable, cane and sugar will have to be produced at lower costs with better varieties and minimum water consumption.

News

Navigation