State govt to announce state advisory price after after being urged by sugarcane growers

State govt to announce state advisory price after after being urged by sugarcane growers

Sugarcane growers in the State are feeling bitter as the GST on sugar and sugar by-products has pushed them into an ungainly situation.

VIJAYAWADA:  Sugarcane growers in the State are feeling bitter as the GST on sugar and sugar by-products has pushed them into an ungainly situation. They say that the purchase tax that used to be reimbursed to them has been stopped on the pretext that purchase tax no longer exists after GST came into force.

As there was no State Advisory Price (SAP) announced by the State government for several years, the sugarcane growers, who hardly get any profit, brought pressure on the successive State governments and as a relief measure, the government has announced to give the purchase tax it gets reimbursed from the Centre. 

“It was just `60 per tonne. Now with the GST implemented from previous fiscal, the State government says there is no purchase tax reimbursement from the Centre, hence no rebate of purchase tax for the 2017-18 fiscal. It is unjustified,” says AP Rythu Sangham general secretary KVV Prasad. 

Pointing out that the State is getting its share of GST on sugar and sugar by-products, Sugarcane Growers’ Association convener Velagapudi Azad said the State government should pass on the same to the farmers. “Five per cent GST is charged on sugar, 28 per cent is charged on molasses and the State government gets its share of 16.5 per cent. It will be getting more than it if other by-products such as bagasse are taken into consideration,” he explained. 

Azad said that on an average `1 lakh per acre is invested by the farmer on sugarcane and one-third of it is for cutting and transportation itself.  The fair and remunerative price (FRP) of `2,700 per tonne announced by the Centre is of no use as it comes with a rider that recovery rate has to be 10 per cent. “Recovery rate is the amount of sugar produced from the sugarcane. In AP, the recovery rate in most sugar factories is less than 9.5 per cent,” he said. 

“If the support price announced by the Centre is not agreeable to the farmers, generally, State governments announce State Advisory Price (SAP), which will be over and above the support price announced by the Centre. It varies from State to State and year to year. AP has done away with SAP for several years now. “It is high time SAP is announced by the government,” demanded sugarcane growers. 

However, when contacted by TNIE, Cane Commissionerate deputy commissioner Venkata Rao said they are not expecting any drop in the production in the current crushing season, which commenced a few days ago.

 “There has been an increase in the area of sugarcane plantation and we are expecting optimal production levels. We expect that sugar production in the State for the current crushing season, which lasts till March next year, to be around 52 lakh MT,” he said. Asked about the SAP, he said the decision has to be taken by the government. 

GST effect?  
Purchase tax that used to be reimbursed to sugarcane growers has been stopped on the pretext that purchase tax no longer exists after GST came into force
Stating the State is getting its share of GST on sugar and sugar by-products, Sugarcane Growers’ Association demands that the State government pass on the same to the farmers
Farmers say FRP of `2,700 per tonne announced by the Centre is of no use as it comes with a rider that recovery rate has to be 10%. In AP, the recovery rate of sugar factories is less than 9.5% 
1.23 lakh hectares is the area of sugarcane cultivation in AP in 2017-18
Despite increase in area of plantation, yield has come down by 11% due to drought and floods

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