They are looking at paddy and maize as more lucrative than sugarcane, sources said. For long, the farmers are demanding Rs 1,500 per tonne of sugarcane, while the mills are unable to pay even Rs 1,000 per tonne.
According to the knowledgeable sources, the cane area has been reduced to 1.35 lakh hectare in the current season 2008-09 while it was sowed in about 1.85 lakh hectares during the last season with an improved production of about 170 lakh tonne, they say. ?We expect about 100 lakh tonne of sugarcane being produced in the current season,? industry sources told FE.
Considering that about 25% to 30% being diverted for jaggery and other consumption needs, only about 70 lakh tonne of cane will be available for crushing, as against 130 lakh tonne crushed in the last season, sources pointed out.
This would mean a direct reduction in the ?crushing-days? to less than 100 days. During the last two seasons, Andhra mills have together worked for about 170 and 130 days, industry sources added. In a bid to stop the crop conversions, the government has to offer quality seed and fertilisers to the cane growers, besides the state also have to offer subsidy on the cost of the harvesting machines. A machine would cost about Rs 75 lakh, which can harvest about 200 tonne in a day.
According to the South Indian Sugar Mills Association (SISMA) sources, while about 175 lakh tonne were crushed during 2006-07, it had fallen to 130 lakh tonne in 2007-08. Though, it will not impact on the sugar stocks, but the profitability of the mills will surely drift, they say. The SISMA, which had met recently, proposed to represent to the state government for additional protection from the neighbouring states from dumping.
While the 37-odd mills in the state, including 12 in cooperative sector, have together reported a net loss of Rs 300 crore in the last season, the sugar dumping by the mills from neighbouring states is affecting adversely. The Andhra mills are demanding imposition of entry duty on the sugar imported from other states.