MUMBAI: Maharashtra's sugar barons have decided to launch a statewide agitation if the BJP government decides to ban sugarcane cultivation.

Revenue minister Eknath Khadse early this month indicated that the state government may ban sugarcane cultivation and crushing in the districts worst affected by drought.

"Either they compensate us with Rs 1 lakh per hectare to stop cultivation or stop making such announcements," said Harshvardhan Patil, former co-operatives minister and director of State Co-operative Sugar Federation. He said the ban would affect the livelihood of over 40 lakh people. The compensation would amount to Rs 8,000 crore.

"There are around 30 lakh farmers in the state who cultivate sugarcane. These sugarcane fields employ 10 lakh labourers who mainly hail from Marathwada. Besides, another 2.5 lakh people are employed in sugar factories," he said.

Sugarcane is a water guzzler. Around 10 lakh hectares in the state are under sugarcane cultivation. Only 15% is under drip-irrigation. It is alleged that the powerful sugar barons of western Maharashtra, who have also been ministers in the erstwhile Congress governments, have diverted Marathwada's share of irrigated water to help sugarcane farmers.

The ex-minister said the government earns annual revenue of Rs 5,000 crore through various taxes from the sugarcane industry, which has an annual turnover of over Rs 50,000 crore.

"The BJP government is still to call a meeting to decide on granting crushing licences for sugarcane factories. The crushing season begins from October 15," said Patil, adding that owing to the water scarcity situation in the state, the sugar production will be down by 30%. Last year, sugar production had touched one lakh metric tonnes.

Patil said the annual general body meeting will be held on September 20. NCP leader Sharad Pawar is also expected to attend the meeting to decide on the agitation, he said.