By Nagesh Prabhu and M. Raghuram

Upset with MSP of Rs. 811.80 a tonne, they threaten Statewide stir

Growers want Rs. 1,550 for a tonne of sugarcane

Factories paid Rs. 1,100 a tonne last season

BANGALORE: A fresh agrarian problem looms over the State, threatening to push sugarcane growers into a financial quagmire.

The farmers, this season, are a worried lot with no change in the Minimum Support Price (MSP) fixed by the Centre. Despite an increase in the cost of cultivation, the MSP has been fixed at Rs. 811.80 a tonne by the Union Government for 2008-09, same as the MSP fixed last year (2007-08).

Farmers associated with the Karnataka Prantha Raitha Sangha (KPRS), the All-India Kisan Sangh (AIKS) and the State Sugarcane Growers Association have threatened to launch a Statewide agitation if the Yeddyurappa Government fails to come to the rescue of growers before November 1.

The growers have been demanding Rs. 1,550 a tonne of sugarcane, the price recommended to the Centre by the Commission for Agricultural Costs and Prices (CACP) for nine per cent recovery of sugar from a tonne of sugarcane. Some of the factories in Bagalkot district have been paying Rs. 1,470 a tonne of sugarcane this season, Kurubur Shantakumar, president of the State Sugarcane Growers Association told The Hindu on Monday.

Glut in 2007-08

Following the glut in 2007-08, many farmers refrained from cultivating sugarcane this year, and the crop area has declined to 3.50 lakh hectares in 2008-09 from over four lakh hectares last year. Sugarcane production is likely to be 300 lakh tonnes this season, down from 450 lakh tonnes last year. The factories will crush about 65 per cent of the production, officials in the Agriculture Department said.

The decline in the crop area is attributed to the financial crisis faced by the farmers last year when a huge quantity of sugarcane was destroyed because of low crushing capacity of the factories. The units crushed 275 lakh tonnes last year. Karnataka is the third largest producer of sugarcane after Uttar Pradesh and Maharashtra.

During President’s Rule last year, Governor Rameshwar Thakur announced a bailout package and granted an additional Rs. 160 a tonne to farmers.

According to official sources, 52 factories, both joint ventures and cooperatives, have a crushing capacity of 1.5 lakh tonnes a day. Ten factories located in the southern districts of the State have begun crushing sugarcane. The liquidity position of the factories has become critical, and several units have not yet cleared Rs. 150 crore arrears due to growers for the sugarcane supplied last season, Mr. Shantakumar said.

The growers said sugar price had shot up from Rs. 1,200 to Rs. 1,620 a quintal and that of molasses from Rs. 800 to Rs. 4,500 a tonne. The price of molasses increased after the ban on the transport of molasses outside the State last year was lifted.

Factories strapped

Industry sources said that with the high cost of borrowing and sugarcane crushing, factories were finding it difficult to raise finance for their operations. The factories paid Rs. 1,100 a tonne for sugarcane during the last season. The factories have been demanding more liberal financial support from the Government. The State Government gave export subsidy, waived purchase tax and transport subsidy for factories last year to revive their financial position.

The industry sources said the performance of the factories, particularly in the cooperative sector, was poor because of underutilisation of capacity, inefficient machinery and poor management.

Minister for Industries Murugesh Nirani, who runs sugar units, had not paid pending dues for the sugarcane supplied last season, a farmer alleged.

Belgaum district produces 43 per cent of the State’s sugarcane yield, followed by Bagalkot (16 per cent), Bidar (10 per cent), Mandya (5 per cent) and Mysore (4 per cent). Factories in these districts failed to lift much of the produce last year because of low crushing capacity.

Growers residing in areas bordering Maharashtra and Andhra Pradesh have been transporting sugarcane to those States. Nearly 35 per cent of sugarcane produced finds its way to khandasari (jaggery) units. As there is no legal provision to fix the price of sugarcane supplied to jaggery units, the growers are paid at the will of the owners, the officials said.