The state government has issued notices to 136 sugar mills for defaulting on payments to farmers. These mills have piled up Rs 2,230 crore arrears for the current crushing season and the amount is likely to rise in the next few months, say industry insiders.
There are 184 sugar mills operational in the state this year most of which belong to politicians. Of the 136 mills hauled up for not paying farmers the pre decided Fair Remunerative Price (FRP), 97 are cooperative and 83 are privately owned. Sugar commissionerate officials said a total FRP of Rs 12,813 crore was to be paid to farmers, of which Rs 10,775 crore has been paid. The FRP is the minimum price mills have to pay farmers.
Mill owners say the sugar prices in the open markets have dipped considerably this year leaving them saddled with huge stocks due to which they have not been able to pay the farmers. But officials say FRP is not related to market conditions. Officials also said that sugar prices were picking up due to policy interventions by the central government like increasing import duty and capping mill level sugar sales two weeks ago. Currently, sugar prices are ranging between Rs 2,850 and Rs 3,000 per quintal —a far cry from the Rs 3,600 levels of November. The FRP is Rs 255 per ton of sugarcane with 9.5% sugar content.
Farmers have decided to stage a protest if payments are not made soon. “The market is controlled by mill owners. They will tweak it the way they want for own benefit,” said MP Raju Setti who is also the chief of Swabhimani Shetkari Sanghatana. He has also demanded that an investigation be carried on the sale of sugar in the last few months since there was no change in the retail prices.