Sugar factories owe Rs 3,818 crore to farmers, says co-op minister

Assets of firms to be seized, sold to pay growers: Prasad

Sugar factories are yet to pay Fair and Remunerative Price (FRP) of Rs 3,818 crore to sugarcane farmers in the State (at Rs 2,200 per tonne), said Cooperation Minister H S Mahadeva Prasad, here on Thursday. 

Addressing a press meet, he said show-cause notices have been issued to such factories. If payment is not made soon, the government would seize the assets of the factories. They will then be sold to ensure payment for farmers, he said. 

In 2014-15, 448.77 lakh metric tonnes of sugarcane was crushed till May 31, using which 49.63 lakh metric tonnes of sugar was produced. Sugar factories were to pay Rs 11,355 crore for 448.77 lakh metric tonnes of sugarcane. A total of Rs 7,536 crore has been paid till date, he said. He said that FRP worth Rs 923.09 crore, for 2013-14 has also been kept pending.

He said that the dip in sugar prices was also one of the causes for delay in payment. The Commission of Agricultural Costs and Prices fixes sugar price based on various factors. It was fixed between Rs 32-34 per kg in 2013-14. However, sugar prices have dropped to Rs 21 kg, causing a loss of Rs 500 per tonne for sugar factories. Central government should provide incentives to offset the losses, he said.

The State had approached the Centre, seeking relief for farmers and sugar factories. However, the Centre has not reacted positively, he said. 

He said that in a recent meeting of chief minsters of sugarcane growing states with the Union Minister for Consumer Affairs, Food and Civil Supplies, a proposal was made to the Centre to provide support price to export 50 lakh metric tonnes of sugarcane, to make mixing of five per cent ethanol compulsory in motor fuels and to bear the cost of transporting sugar from South India to North India. 

But, the Centre decided to provide subsidy for exporting raw sugar and increased the import cess for sugar from 25 per cent to 40 per cent. Local farmers will not benefit from these decisions, he said.

Following the delay in FRP payment to farmers, the government has seized the warehouses of six sugar factories. They are Renuka Sugars, Munavalli; Ghataprabha Cooperative Sugar Factory Ltd, Gokak; Renuka Sugars, Buralakatti; Gokak Sugars, Kulavi; Raibagh Sugar Factory, all in Belagavi district and Bhavani Sugar Factory Ltd in Bidar district.

Of these, three have got a stay from the High Court on selling the sugar. The State will sell the sugar in the remaining warehouses and ensure payment to farmers. However, it is yet to find a buyer, he said. On the closure of Srirama Cooperative Sugar Factory in K R Nagar taluk, Mysuru district, he said measures are being initiated to restart the crushing process there.

On the double murder reported in Gundlupet taluk, Chamarajanagar district, following Gram Panchayat elections, he ruled out political rivalry as the cause.