Karnataka to clear Rs 923 crore arrears to sugar cane farmers

Chief Minister Siddaramaiah on Tuesday announced that the State government would further absorb the dues to be paid by sugar factories to farmers for 2013-14 by releasing Rs 923 crore in two installments.

The chief minister made the announcement while replying to a protracted debate on the issue during the Legislative Assembly session here.

The State government had in 2013-14 given assistance to sugar mills in various forms to the tune of Rs 1,173 crore to clear their dues to farmers.

Back then, the price for a tonne of sugar cane was fixed at Rs 2,500. Majority of the factories have paid Rs 2,300 per tonne to farmers.

The remaining Rs 200 per tonne, amounting to Rs 923 crore, will be paid by the State government in two installments. The first installment will be paid by July 10 and the next installment will be made by July 31. The arrears would be credited directly to the farmers bank accounts.

The chief minister said funds to be released to farmers would be included in the supplementary budget. Sugar stock seized from the mills has to be sold, too, he added.

For the first time, the State government will be confiscating stock from defaulting sugar mills. As many as 24 factories have already obtained a stay order against seizure from the court.

The Centre has fixed Rs 2,200 per tonne as the fair & remunerative (FRP) price for sugar cane for the crushing season 2014-15.

No factory is prepared to pay the price as per the FRP. In this situation, the Centre will have to step in to help the farmers, said Siddaramaiah.

The government will lead an all-party delegation to meet Prime Minister Narendra Modi seeking his intervention, said the chief minister. Even Maharashtra and Uttar Pradesh, where sugar cane is grown in large quantities, are facing the same problem, he added.