Will the distance between the two factories in the sugarcane production belt, which is now fixed at 25 km for Maharashtra, remain?
Will the distance between the two factories in the sugarcane production belt, which is now fixed at 25 km for Maharashtra, remain? Swabhimani Shetkari Sanghatana (SSS), a farmers’ association , has sought the removal of the aerial distance between two factories in order to increase competition among the millers and enable farmers to get better rates. The Sanghatana has called for an open market to increase competitiveness in the sector.
In response to the demand from the Sanghatana, the Maharashtra Sugar Commissioner has sought time and called for a report from the neighbouring sugarcane states. In other states, the aerial distance between two sugar factories is fixed at 15 km. Interestingly, in Maharashtra, the aerial distance is fixed at 25 km which means that another sugar factory cannot be established within this distance.
Yogesh Pande, spokesperson, Swabhimani Shetkari Sanghatana, said that the aerial distance between factories needs to be removed to encourage competition. “Let open market conditions prevail and let the fittest survive. The mandatory 25 km distance means that there is monopoly over cane. This leads to discrepancy in the Harvesting and Transportation (H&T) costs,” he pointed out.
Over the years, while no new factories are allowed in the state, these existing factories have increased their crushing capacities and some have even doubled capacities,” he remarked. The aerial distance between factories was initially decided to maintain the economy is not derailed and there is no shortage of raw material for the millers.
A recent analysis of the state’s sugar season reveals that factories are cutting Rs 481 to Rs 908 per tonne towards H&T cost from the Fair and Remunerative Price (FRP) bills of farmers. Private mills are apparently cutting more money from the farmer’s cane bills as compared to cooperative mills, according to reports. There has been a demand to fix the H&T cost before the start of the next season.
The issue of the removal of aerial distance between two mills had cropped up around four years ago when the Bharatiya Janata Party (BJP) government in Maharashtra was seriously considering doing away with the the 25-km mandatory distance required to be kept between the two sugar factories.
The proposal was at a preliminary stage and had evoked strong reactions from the state’s sugar sector comprising 179 registered cooperative and 65 private factories.
Maharashtra’s sugar sector was largely dominated by the Nationalist Congress Party (NCP) and the Indian National Congress. Farmer activists pointed out that now that several NCP and Congress leaders have switched loyalties and moved to the BJP, it is unlikely that the condition for distance will be removed.
Shekhar Gaikwad, Sugar Commissioner Maharashtra said that the report is in the final stages of preparation and will soon be submitted to the state government. We have sought reports from Haryana, Telangana and Andhra Pradesh on the aerial distance that should be maintained between two factories,” he said. He however refused to comment on the recommendations sent by the Commissionerate.