The Tamil Nadu Government has hiked sugarcane prices for the 2013-14 season.

The government has fixed the rate at Rs 2,650 a tonne, including a transport charge of Rs 100 to be borne by sugar mills. During the current sugar season, farmers will get Rs 300 a tonne more for their crop than they did in the last season, said an official press release.

The Centre had set the support price, Fair and Remunerative Price (FRP), at Rs 2,100 a tonne. Tamil Nadu has added Rs 550 more to the FRP to fix the State Advised Price at Rs 2,650.

Sugar mills have expressed concern over the hike in the backdrop of stagnating prices.

Industry representatives, who did not want to be quoted, said with sugar prices at about Rs 2,750 a quintal, the hike in sugarcane price is unviable. Payment to farmers will be delayed and arrears will mount, they said.

More subsidy

Other State governments have either maintained last year’s sugarcane price or announced significant subsidies or tax concessions to support payments. In UP, where the price is Rs 2,800, the State Government has announced tax concessions of over Rs 200. Karnataka has announced a total subsidy of Rs 250 to farmers and mills against a sugarcane price of Rs 2,650.

But Tamil Nadu levies a purchase tax of about Rs 60 a tonne and a cess of Rs 5. Transport charges borne by mills are close to Rs 150. All of this means sugar mills will shell out over Rs 2,700 a tonne.

Farmers’ representatives said the continuous increase in input costs including fertiliser, labour and power shortage had added to the cost of cultivation.

The State Government should emulate UP and Karnataka and pass on tax concessions and announce subsidy to farmers.