Sugar factories on warpath, say can't pay farmers' dues

The sugar factories which have defaulted in paying dues to sugar cane growers appears to be on a warpath with the State government.

Close on the heels of the district administration issuing notices to factories asking them to clear the arrears, the factory owners have categorically stated that it was impossible for them to pay fair and remunerative price (FRP) to sugar cane growers. Welcoming the government’s move to auction the sugar stocks at factories to recover farmers’ dues, the factory owners have said that they were unable to pay FRP since the price of sugar had plummeted owing to a glut in the market.

In the beginning of crushing reason for 2014-15, the price of the sugar hovered at Rs 3,000 per quintal, but now it has come down to Rs 1,900. Under such circumstances, it is not possible to pay FRP of Rs 2,200 per metric tonne of sugar, the factory owners say.

South Indian Sugar Mills Association member Jagadish Gudagunti said that the country had excess sugar stock of 120 lakh metric tonne and a major portion of it was rotting in godowns since it was not possible to export the produce. He said that sugar mills which have sold byproducts such as molasses, bagasse and 30 per cent of their sugar produce, have paid Rs 1,800 per metric tonne of sugar cane.

“It is not possible to pay more for sugar cane,” he said. A owner of a sugar mill in Mudhol, who wished to be unnamed, said that they were ready to handover the keys of their godowns to the government authorities so that they can sell the stock and pay farmers.

Speaking to Deccan Herald, Ramanna Talevada, the president of Ranna sugar factory said that the sugar industry was in trouble at present and hence it was not possible to pay FRP to sugar cane growers. He said that the government should not permit setting up of new sugar mills if it really intends to protest sugar industry.

The Bagalkot deputy commissioner has issued notices to nine sugar factories in the district asking them to clear dues to the farmers within seven days, with 15 per cent interest. The notice says that steps would be taken to recover the arrears by selling the sugar stock in godowns.

The nine sugar factories together owe Rs 790.71 crore towards sugar cane purchased from farmers during the year 2014-15. Apart from this, the factories are also in arrears of Rs 190.23 crore towards the sugar cane purchased during 2014-15.