Indian sugar mills association

Sugarcane pricing battle escal

Date:	01 Nov 2011

Source:

Reporter:

News ID:	636

Pdf:
Nlink:

Mumbai: The tussle between sugar mill managements and farmers over the purchase price for sugarcane is threatening to reach a flashpoint that is likely to shake up the politics in western Maharashtra, the bastion of agriculture minister Sharad Pawar.

On Monday, Swabhimani Shetkari Sanghatana, a farmers` organisation led by independent MP Raju Shetti, decided to take a protest march of at least 50,000 farmers from Pandharpur to Baramati, Pawar`s home turf, to demand a better deal for sugarcane farmers. The Sanghatana has decided that farmers will not sell sugarcane to sugar co-operatives unless they get a price of Rs2,350 per tonne.

Shetti told HT: “They (sugar barons) don`t want to give money to farmers. Otherwise, if one takes into account the earnings of the factories from bagasse, molasses, then even after subtracting transport cost, farmers can get an advance of Rs2,350 per tonne.“

“How was it that last year some factories gave farmers Rs2,500 per tonne even though the support price announced was Rs 2,000?“ he asked.

“I have demanded a CBI inquiry into all sick sugar factories because these factories became defunct due to mismanagement and corruption,“ he added.

The Union government has fixed a Fair and Remunerative Price (FRP) of Rs 1,450/tonne for sugar recovery of 9.5% and Rs153/tonne for every 1% rise in recovery above 9.5%. As the average recovery in Maharashtra is 11.5%, the average FRP for the state this year is Rs1,756/tonne.

Sugar mills have paid the first advance of around Rs1,500/tonne to Rs2,000/tonne to farmers in the current 2010-11 crushing season. Now, for the second installment, farmers are demanding Rs2,350 per tonne.

Sugar mill managements, however, claim that the price demanded by farmers is unviable given that the market rates for sugar are hovering around Rs 2,500 per quintal. The mill managements claim that with this sum they have to take care of salaries for mill workers, transport, payment to labourers, and farmers` dues.

With neither side willing to budge, and with elections to local self government institutions just around the corner, the stand-off also spells trouble for the ruling alliance, specifically the Nationalist Congress Party (NCP).

The NCP wields its power from sugar politics; a majority of its leaders are local satraps who control sugar co-operatives and thus the confidence of the farmers, who make up their vote bank. (see box)

Shetti, however, has emerged as a Pawar baiter in the last seven years, challenging this traditional power structure. In 2004, this leader of small farmers and cane cutters took on three sugar barons to get elected as legislator from Shirol in Kolhapur. In the 2009 elections, he contested against NCP MP Nivedita Mane and won from Hatkangale, a constituency that had been nurtured by Mane`s father-in-law for a decade.

Deputy chief minister Ajit Pawar, also nephew of Sharad Pawar, claimed the crisis was rooted in a battle for political gains instead of farmers` interests. “I think even Shetti knows that sugar mills cannot afford to give the price that they are demanding now. Our prices are dictated by market economics.

This agitation is politically motivated but it is not in the interests of farmers or sugar mills. If sugar factories are shut down, farmers` interests will be hampered the most. After all they collectively own these mills,“ said Pawar.

He added: “Farmers are swayed by the idea that if they agitate they will get better prices but that`s not feasible. If export of sugar is allowed by the Centre, we may be able to give farmers better rates.“

News

Navigation