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Updated: January 31, 2014 09:47 IST

Sugar mills in TN pay below support price

R. Krishnamoorthy
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Sugarcane at a pongal market. File photo: T. Singaravelou
The Hindu Sugarcane at a pongal market. File photo: T. Singaravelou

Farmers are supposed to get Rs. 2,650 a tonne but paid Rs. 2,350 a tonne

The 2013-14 crushing season has started, but farmers are disappointed over being denied the support price of Rs. 2,650 a tonne of sugarcane recommended by the State Government, by mills.

Though farmers complain sugar mills have stuck to last year’s rate of Rs. 2,350, they have no option left other than accepting whatever they are given.

Farmers in Erode wonder how the mills can refuse to comply with the State Government's recommendation, and have planned to approach the district administration seeking its intervention.

“Denying farmers their due is not fair. The government has to step in and prevail upon the mills to pay farmers the recommended support price,” said K.V. Ponnaiyan, State coordinator of Tamil Nadu Sugarcane Growers’ Association Struggle Committee.

Last December, the State Government announced Rs. 2,650 as the procurement price for a tonne of sugarcane that includes the Fair and Remunerative Price of Rs. 2,100 fixed by the Union Government.

The State Advisory Price (SAP) was fixed at Rs. 550 a tonne, inclusive of transport charge of Rs. 100.

The announcement evoked mixed reactions among farmers. One section of farmers felt that the support price must be accepted without grudge as the sugar sector in the country was in turmoil because of the crash in the price of the product in international market, while another section opined that the State Government ought to have followed the policy of the Union Government to increase the FRP progressively.

The Cabinet Committee on Economic Affairs (CCEA) had increased the FRP from Rs. 1,700 a tonne to Rs. 2,100 a tonne over last year, linking it to basic recovery rate of 9.5 per cent.

But, the State Government’s SAP this year is low when compared to Rs. 650 fixed as field rate for 2012-13 crushing season. And this year, the SAP of Rs. 550 is inclusive of Rs. 100 towards transport charges.

Ultimately, the farmers were to have gained by only Rs. 300 more a tonne this year. But, even this has been denied to them now.

Farmers, however, hope that the Union Government’s decision to extend Rs. 6,600 crore as interest-free loan to cash-strapped sugar industry for payment of cane arrears to farmers will bolster the finances of the sugar mills, and safeguard the sector in the long run. Farmers say increasing support price has become essential since the cultivation expenditure has gone up substantially.

In future, the system of government fixing the support price must be dispensed with and the recommendation of Dr. Swaminathan Committee for arriving at the cost of agricultural produce at 50 per cent higher than the production cost must be given a serious consideration by the Union and State Governments, said Mr. Ponnaiyan.

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