Centre may come up with financial package for mills

To resolve the ticklish issue of price payable to farmers for sugarcane, the Centre has invited the Chief Ministers of major growing States to participate in the meeting of the Sharad Pawar-led ministerial group here on December 6. They are the Chief Ministers of Tamil Nadu, Karnataka, Maharashtra and Uttar Pradesh.

While the Centre is expected to come up with a financial package for mills, it is the State governments which have to set a sugarcane price acceptable to the industry and remunerative for farmers.

In the package being worked out, the Centre looks at enhancement of ethanol blending from 5 to 10 per cent, an incentive on export subsidy for sugar refined from raw sugar and interest-free loan from the Sugar Development Fund, well placed sources told The Hindu.

In a face-off between mill owners and farmers, more than half of the sugar factories in the country have not begun crushing, while sugarcane is yet to be harvested. Any further delay will have a huge impact on wheat sowing in the forthcoming rabi season.

The C. Rangarajan Committee, which recommended de-control of the industry last year, suggested sharing between farmers and mill owners of revenue from sale of sugar, molasses, bagasse and such other by-products. But this formula has not been accepted and is not being implemented in any State.

Mill owners say mounting arrears and falling sugar prices (in the market) on account of surplus sugar (with a carryover stock of 9 million tonnes) are to blame for their not being able to pay the State Advised Price fixed by most States as against the minimum payable Fair and Remunerative Price of Rs. 210 per quintal set by the Centre.

Meanwhile, Ajit Singh’s Rashtriya Lok Dal has announced its decision to resort to chakka jam (road blocks) all over Uttar Pradesh. For now, the U.P. government has frozen the State Advised Price at last year’s level of Rs. 280