The Hindu Business Line : Farmers should get higher rates for cane, says Pawar

Different tune: The Union Minister for Agriculture and Food, Mr Sharad Pawar, with the Agriculture Secretary, Mr T. Nanda Kumar, at the Economic Editors’ Conference, in the Capital on Wednesday.–

Our Bureau

New Delhi, Nov. 4

The Union Food and Agriculture Minister, Mr Sharad Pawar, has urged sugar mills to pay farmers cane prices more than the Centre’s Fair and Remunerative Price (FRP).

“The FRP isn’t the final price. It is a benchmark and indicative price. Farmers should get higher than this,” the Minister said at the Economic Editors’ Conference here on Wednesday.

Mr Pawar’s statement comes barely two weeks after his Ministry (Department of Food and Public Distribution) issued an order, dated October 22, exempting mills from paying any cane price above the FRP set by the Centre.

Earlier Stand

The order made it clear that in the event of any State Government fixing a state advised price (SAP) over the FRP, there would be no legal obligation on the mills to pay the former rate. Instead, the onus for coughing up the difference would lie squarely with the State Government concerned.

The Centre, on October 29, fixed the FRP for cane crushed during the current 2009-10 season (October-September) at Rs 129.84 a quintal, linked to a sugar recovery of 9.5 per cent.

As against this, Uttar Pradesh (UP) has announced a SAP of Rs 162.50-170 a quintal, with Punjab and Haryana likewise fixing rates of Rs 170-180 and Rs 175-185 a quintal, respectively. Even the Tamil Nadu Government’s SAP of Rs 143.74 a quintal (linked to 9.5 per cent recovery) is higher than the FRP.

The FRP of Rs 129.84 a quintal for 2009-10 is ironically lower than even the SAP of Rs 140-145 a quintal fixed by UP in the previous season. This is even as ex-factory sugar prices have almost doubled from Rs 1,700-1,800 to Rs 3,200-3,300 a quintal in the last one year.

Meet to discuss issue

Mr Pawar said that he would soon meet sugar millers to discuss the issue. “When you are selling sugar for over Rs 3,000 a quintal, you need to pay more to farmers,” he said, while warning that if mills fail to do so, they will not get any sugarcane.

In this context, the Minister mentioned Maharashtra, where mills are paying Rs 200 a quintal. Even in Karnataka, farmers are being paid Rs 180-190.

Meanwhile, UP and Punjab have already protested against the Centre’s decision to ask State Government to bear the cost of declaring a cane price above the FRP. Last week, the UP Chief Minister, Ms Mayawati, wrote to the Prime Minister, Dr Manmohan Singh, alleging that the State Government had not been taken into confidence before instituting the new FRP regime.

The Punjab Government, on the other hand, has completely ruled out any cane purchases taking place in the State below the SAP fixed by it.

“There is no question of our paying the difference between FRP and SAP. We will be following our (State) law with regard to payment of sugarcane crop”, the Punjab State Agriculture Director, Mr B. S. Sidhu, said, according to an agency report.

Regulation

Mr Sidhu referred to the Punjab Sugarcane (Regulation of Purchase and Supply) Rules, 1958, which said that no cane can be bought for a factory at a price below that fixed by the State’s Sugarcane Control Board.

Earlier, Mr Pawar said that the country’s sugar output this season would be 16 million tonnes (mt), which along with opening stocks of 2.2 mt, would fall short of domestic consumption requirements of 22.5-23 mt. The gap will have to be met through imports.

A Ministry official said that mills have since October 2008 contracted about 5 mt of raw sugar. Besides, another 0.8 mt of imported white/refined sugar has been separately contracted. “Of the 5 mt of raws contracted, 2.3 mt have already arrived, with one mt being processed in the last season itself. Arrivals of white sugar would have around 0.225 mt”, the official told Business Line.

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