Sugar solution eludes Maharashtra

Farmers in Maharashtra have been demanding Rs 2,350 per tonne of sugarcane. They are paid Rs 1,375 per tonne,the price worked out from factors such as the national standard,the quantity of sugar produced per tonne of cane in the state,and the amount spent in cutting and transportation (see box).

“If the government forces the factories to pay about Rs 2300 per tonne to sugarcane the retail price would go up by at least Rs 5 to Rs 35-37 a kilo or more,” said Vijay Gujrathi,chairman of the Sugar Traders’ Association.

Farmers have cited rising costs of labour and other aspects,demanded a price equivalent to the market retail rate after deducting the cost of conversion,and challenged the Commission for Agriculture Cost and Prices benchmark as well as a State Cooperative Bank order that factories paying more than Rs 1,375 would become ineligible for loans. Last year,agitating farmers had successfully got their prices raised — from Rs 1,450 per tonne to between Rs 1,500 and Rs 2,000 — but the Cooperative Bank order will now restrain factories.

Over the last one month,the Cooperatives Ministry and the Sugar Commissioner have held dialogues with farmers’ groups and factory owners. “We met Patil and discussed the price. We remained firm that we would not settle for anything below Rs 2,350 as the first instalment,” said Raju Shetty,MP and president of the Swabhimani Shetkari Sanghatana that organised last week’s protest.

Factories pay in instalments timed with the release of bank loans. Sugar commissioner Vijay Singhal said,“If farmers are paid what they are demanding then the retail price of sugar will go up in the entire country. The next time they will ask for Rs 2,500,Rs 3,000,anything.”

Raghunath Patil,Maharashtra president of the Shetkari Sanghatna,alleged that some private factories have offered even less than the government rates. The minister said,“I agree there are some factories which haven’t followed the payment guidelines. We have issued notices.”

Unless they get their prices,Patil warned,“The country will have to do with only 50 lakh tonnes of sugar in storage from the last season,because there will be no supply from Maharashtra this year.” Maharashtra last year accounted for 90 lakh tonnes of the country’s total produce of 220 lakh tonnes.

At a public function in Satara during the weekend,the Cooperatives Minister urged Union Agriculture Minister Sharad Pawar to help resolve the issue. “I am not the Co-operatives Minister,” Pawar said. “Patil [should be able to do the job.”

Money Matters
Rs 1,450/tonne

This is the FRP (fair and remunerative price) fixed for sugarcane by the Commission for Agriculture Cost and Prices. It is based on a recovery rate of 9.5 per cent,a measure of the sugar extracted from every tonne; 9.5% signifies 95 kg per tonne.

Rs 1,375/tonne

Price fixed for farmers in Maharashtra,where the recovery rate is 11.3%. It has been worked out on the basis of the CACP standard at 9.5%,with Rs 146 added for every percentage point of additional recovery,after which cutting and transportation costs are deducted from the total.

Rs 2,350/tonne

The demand by farmers who agitated last week. They estimated that a tonne of cane produces sugar that would fetch Rs 3,000 on retail,and deducted Rs 700 per tonne spent by cooperatives that are supposed to be “no-profit units”. This works out to Rs 2,300,which they scaled up. Another group wants Rs 2,200.

Rs 30-32/kg

The retail price sugar now fetches in and around Pune,where the agitation has been centred. If the government accepts the farmers’ demand of Rs 2,300 per tonne of cane,then the retail price will rise by around Rs 5,touching Rs 35-37 per kg,as per Sugar Traders’ Association estimates.

2010

Last year,the FRP was fixed at Rs 1,450 but farmers agitated successfully for a raise. Based on the varying rates of recovery,farmers in Western Maharashtra got about Rs 2,000 per tonne while those in other parts of the state got between Rs 1,500 and Rs 1,800.