In the backdrop of a series of suicide by sugarcane growers in the State because of unremunerative prices and a serious tussle between the government and sugar mills over clearing dues, the possibility of about 40 new sugar mills coming up in the State has raised concern among the owners of sugar factories.
The Centre recently issued the industrial entrepreneur memorandum (IEM) to 41 companies to set up sugar mills in Karnataka. According to M.K. Aiyappa, Commissioner for Cane Development and Director of Sugar (CDDS), 41 companies received the IEMs — the approval from the Centre for new proposals or expansions of their capacities from 2007 to 2013.
Minister for Sugar H.S. Mahadev Prasad has said in the Legislative Assembly that the State has received applications from 14 companies for setting up sugar mills apart from the 41 that have received the IEMs from the Centre. If all these sugar entrepreneurs set up their mills, the State could see over 50 new units in the next few years.
But considering the fact that the existing sugar mills themselves are struggling to survive, because of the fall in the price of sugar and their alleged inability to pay the growers the fair and remunerative price (FRP), it is still not clear whether all those who secured the IEMs will go ahead with their projects.
The companies which are interested in setting up new factories have to comply with 10 guidelines set by the CDDS, including getting distance certificate which specifies that new factory should be beyond the radius of 15 km from the existing mills.
Mr. Aiyappa said the companies which had secured the IEMs had deposited Rs. 1 crore in all with the CDDS and started the process of setting up infrastructure.
The State chapter of the South Indian Sugar Mills Association (SISMA), however, has its reservations over the development. Pawan Kumar, president, SISMA-Karnataka, said the government should not allow new sugar factories for at least two years. SISMA is also upset with the fact that the Centre had not taken into consideration its suggestion to increase the distance between the old and new mills from the present 15 km to 25 km.
