The Hindu Business Line : AP sugar factories call for subsidy to farmers

Hyderabad, Nov. 13 Pushed to the corner by low sugar prices, high cost of cane and increasing demands for enhanced returns to the farmers, sugar factories have asked the Andhra Pradesh Government to give Rs 250 a tonne to farmers as subsidy.

“We cannot give beyond the SMP band of Rs 812-Rs 900. As it is, most factories are reporting losses, unable to recover the cost of production,” Mr N. Nageswar Rao, President of South Indian Sugar Mills Association (SIMA), said.

Entry tax

Addressing a press conference here on Tuesday, he also wanted the State to impose an entry tax on sugar imports from the neighbouring States of Maharashtra and Karnataka. He added that many mills didn’t have the storage facilities to stock the excess sugar.

Being forced to keep it in open yards and pay dues to the farmers, companies were resorting to selling sugar at much lower prices in other States. “This will put additional burden on factories that are already weighed down,” he said.

Worrying that the situation might further deteriorate this year, he cited market expectations that put sugar prices Rs 50-Rs 75 lower than the current prices. The prices may rule around Rs 1,175-Rs 1,200, he said.

Co-generation

A delegation, led by Mr Nageswar Rao, had met Dr Y.S. Rajasekhara Reddy, Chief Minister, and submitted a wish-list to safeguard the interests of the sugar sector.

“We told him that the cap of 55 per cent on plant load factor (PLF) is a big disincentive to the sugar factories. As a result of this decision, the State is not in a position to tap the full potential of cogeneration assets,” he said.

The power-starved State was buying power at a high rate of Rs 7 a unit. “If we allow the factories to step up generation to their full potential, the factories can supply power at half that price,” he felt.

Attributing the woes faced by the sugar sector to the ban on exports slapped a few seasons ago, he said the Government move to allow production of syrup directly would not bail out the sector immediately.

More Stories on : Sugar | Industry Associations | Andhra Pradesh

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