Troubled start for Maharashtra sugar season

Written by Nanda Kasabe | Pune | Updated: Dec 19 2014, 14:30pm hrs
Maharashtra's 2014-15 sugar season is in for a troubled start yet again. BJP ally Swabhimani Shetkari Sanghatana (SSS), the farmer organisation led by Kolhapur MP Raju Shetti, could pose problems for the new government. SSS has demanded the first cane installment of R2,700 per tonne for farmers from sugar mills, failing which it has threatened to launch an agitation.

Significantly, last week, Shetti at a press meet in Pune had said they needed to give time to the new government to settle down and also wait for the formation of the New Cane Price Control Board. At the 13th cane conference of the SSS held at Kolhapur, Shetti changed stand and said the organisation is meant for farmers and will fight for their rights if necessary.

SSS has emerged as an aggressive organisation in western Maharashtra, fighting for higher cane prices for farmers at the start of the cane crushing season in the state for the last three-four years.

Sanjiv Babar, MD, Maharashtra State Cooperative Sugar Factories Federation, indicated that it will be difficult for sugar factories to pay R2700 per tonne as the first installment. The market rate for sugar stands at R2,650 per tonne while the cost of production comes up to R3,400-3,500 per tonne. "Adjusting the economics is going to be a tough task for mills. Sugar mills in Uttar Pradesh today owe arrears to the tune of R4,800 crore and if the mills in Maharashtra continue to give such high payments, they will face the same fate as mills in UP," he added.

According to Babar, Maharashtra State Cooperative Bank and District Cooperative Credit Banks have given a valuation of R2,235 per tonne, which includes R1,485 as first cane installment, bank recovery at R500 per tonne and a processing cost of R250 per tonne. Even if the recovery goes up to 12%, the valuation can only be increased by another R100. How the mills adjust the cost is a big issue," he pointed out. The valuation given by these banks is effective from October 31, 2014.

Shetti's organisation has demanded a change in the base of the fair remunerative price (FRP) decided by the agriculture price commission from 9.5% to the earlier rate of 8.5% in the interests of farmers. He also demanded an increase in ethanol blend from the current 10% to 20%. Shetti said that cases against farmer leaders who had fought for their cause should be taken back and demanded penal action against mills owners who do not comply with the recommendation of the Cane Price Control Board. The Union government has announced R2,550 as FRP for sugarcane.

Shetti said he is in favour of the recommendations of the Rangarajan committee where the cane price will be fixed on the 70:30 formula. As per this formula, a sugar unit without any byproducts business will have to pay cane price of 70% of its revenue realisation, while it will have to spend 30% on its functioning.

Farmer leaders have also been laying much emphasis on the fact that the issues of casual cane labourers in Maharashtra are yet to solved. Casual cane labourers in Maharashtra had threatened to go on strike before the start of the sugar season of 2014-15.

The Maharashtra Ustod Kamgar Vahtuk Majoor Va Mukadam Sanghatana that looks into labour issues of sugar workers had earlier indicated that no worker will cut cane in factories or will allow factories to begin functioning unless the demands of workers are met. However, when contacted, Shrirang Bhange, state secretary of the outfit, said it has decided to unconditionally stop the agitation after meeting BJP leader Pankaja Munde, who it considers its new chief after the demise of Gopinath Munde.

Around 100 cooperative mills and 65 private factories will crush cane this year. Around 21 mills in the state have begun crushing operations. Mills in Kolhapur where SSS has a strong presence are yet to begin crushing.