While growers are threatening to intensify their protest demanding a higher price for sugarcane, the sugar industry is preparing for a confrontation if the government imposes an additional financial burden on it. This has become the first real challenge for Chief Minister Siddaramaiah.
Meanwhile, opposition parties are vying to put the Siddaramaiah government on the mat with a demand to increase the minimum support price of sugarcane to at least Rs 3,000 per tonne after the suicide of farmer Vittal Arabhavi.
The government has announced a minimum support price of Rs 2,500 per tonne sugarcane. Later, bowing to pressure from farmers and Opposition, it had announced an additional incentive of Rs 150 a tonne, which would be paid from its own coffers. Even as the government is mulling to raise the support price the sugar factories are preparing for a legal battle against the government. They are contemplating to send a clear message saying if pushed to the wall they would have to close sugar mills.
“The sugar price in the last one year has fallen from Rs 34 a kg to Rs 26 a kg. With good monsoon and a sugar glut already in the market, the price may fall even further.
“Any further increase in sugarcane price should be borne by the government. If not we have no option but to take a legal course for our survival or close down the sugar factories,” vice-president of South India Sugar Mills Association (SISMA), Karnataka chapter, Pavan Kumar told Express.
He also stated that many factories were not able to clear the previous dues of the farmers and any additional burden would further worsen their financial condition.
According to SISMA sources, a tonne of sugarcane yields about one quintal (100kg) of sugar. The production cost per quintal of sugar is over Rs 3,000.
They said it would be impossible for factories to pay more for sugarcane with the present sugar price being Rs 2,400 per quintal. “We want the government to hold talks with the sugar industry before taking any decision. Closure of factories is not the right option as lakhs of sugarcane farmers would be hit,” Pavan Kumar said.
According to him, a higher price should be fixed for bulk consumers of sugar, like producers of soft drinks and confectioneries without disturbing the sugar price for ordinary consumers.
Sugar Mill Owners to Meet
With the government firm on implementing the order on procurement price fixed by it, sugar factory owners will meet in Belgaum on Friday to discuss the future course of action.