Farmers fear that implementation of total prohibition, even if in phases as proposed by the new Government, might not augur well for economic viability of sugar mills in the State.
Cane farmers
Mills with distilleries fear that they would incur heavy revenue losses since Indian Made Foreign Liquor manufacturers procure rectified spirit from them. Cane farmers wonder why the Government has not specified how the revenue loss would be recompensed, Subi Thalapathi, representative of Thadapalli-Arakankottai Ayacut Farmers’ Association, said.
The AIADMK has promised phased implementation of prohibition by reducing working hours of Tasmac liquor outlets, reducing number of shops, closing down bars and opening of rehabilitation centres.
Future losses
Farmers say the State Government will have to raise the cap on ethanol production for sugar mills to make good future losses due to the prohibition policy. They have a reason to emphasise on this point since the Central Government has promised to pass on subsidy benefit of Rs. 4.50 per quintal of sugar in the event of the mills meeting 80 per cent target set for ethanol production.
Last year, oil marketing companies had announced intention to procure 2.66 billion litres of ethanol for their 10 per cent mandatory blending with petrol. The procurement price varies between Rs. 48.50 and Rs. 49.50. The realisation for the mills is Rs. 41 to Rs. 42 per litre, about Rs. 5 more than what was prevailing earlier.
But, scaling up of ethanol production was not possible in Tamil Nadu since the State had imposed a cap of 50 lakh litres, so as to make sure that rectified spirit, a pre-form of ethanol with 95 per cent purity, is made available for IMFL manufacturers. The mills are helpless though they have a cumulative capacity to produce 6.25 lakh litres of ethanol a day.
Cheaper costs
But, again, the imposition of 14.5 per cent VAT on alcohol has resulted in stagnation of the produce. Every month, the mills have an average monthly alcohol inventory of 2.75 crore litres. But, a large quantity stagnates since IMFL manufacturers are able to import alcohol from sugar mills in Karnataka at cheaper costs.
The mills, according to an official here, are keenly looking for a green signal from the newly-elected government for scaling up ethanol production and meeting the target set by the Centre, in the interests of farmers.
