Govt refuses to clear dues owed by mills

18 factories which are yet to make payment to farmers served with notices: Minister

The State government on Friday refused to set a deadline for making sugar mills to clear their dues to farmers for the year 2013, though it reiterated that it is committed to making the mills pay Rs 2,500 per tonne to the suppliers.

Replying to a protracted discussion on pricing of sugarcane in the legislature, Sugar Minister H S Mahadev Prasad said of the 64 functioning sugar factories, 42 are private ones. While some of them have paid Rs 2,500 per tonne of sugarcane as fixed by the Sugar Control Board, some have paid much below it. But all factories have to make the payment at the rate fixed by the government for the last year, he added.

The dues to be cleared by the mills towards farmers are to the tune of Rs 1,728 crore. The factories were directed to clear the dues up to Rs 2,100 by November-end, another Rs 200 by December-end, and the remaining Rs 200 before March next in two installments. The government is also ready to absorb half of the interest amount to be paid to farmers by factories.

For the vociferous demand by the Opposition that the government itself should clear the dues and get it reimbursed by the mills, the minister did not make any commitment, though he did not clearly say that the government can’t concede to the demand. He said the chief minister had announced the government would be giving Rs 150 a tonne to farmers in addition to the payment to be made by the factories. The government had released Rs 563 crore towards this, he pointed out.

From last December till November this year, the government could not force sugar mills to make the payment as assured by it, as the High Court had issued an interim stay. The Court had directed the government not to take harsh action against the mills, he added.

The minister said in May, the government issued an order directing factories to make payment as per the Fair and Remunerative Price (FRP) fixed by the Centre. The South Indian Sugar Mills Association (SISMA) had moved Court questioning the GO. But the Court on November 6 this year had set aside the SISMA petition.

Mahadev Prasad said that as many as 18 factories had not made the payment as per the FRP. They have been issued with notice as per the Sugar Control Act 1966. “Later, 15 factories fell in line and made payment. Ghataprabha Cooperative Sugar Factory, Gokak; Shivasagar factory of Ramadurga and Bhavani Sugars in Bidar remained defaulters,” he said.

The government had issued seizure orders of these factories. The farmers were paid as per the FRP to those who had supplied cane to Shivasagar factory. Bhavani sugars is yet to clear Rs 81 lakh and the auctioning of Ghataprabha factory has begun. But so far none has responded to it, he added.

Replying to the allegations that the government was soft-peddling the defaulters, the minister said the government did not come down heavily on the mills because the crushing season has begun now. Sugarcane growers would have been put to inconvenience, had the government taken action against the factories, he added.

He said stringent action should be taken against the defaulting factories by the Centre under the Sugar Control Act. “But if the State has to initiate action, the Centre’s permission is required. The permission has been sought.

From the current year, the payment to farmers is going to be done in two installments and this could put an end to many problems.”

The minister did not accede to the demand by the BJP to reintroduce ‘ex-gate’ and ‘ex-field’ price system respectively for south and north Karnataka factories respectively.
Mahadev Prasad also said the government-owned MySugar in Mandya would be crushing cane this year without the financial support from the government.

Dissatisfied with the reply, the BJP members staged a walkout in the Council and in the Assembly they staged a dharna.

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