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As the sugarcane crushing season progresses, farmers in Andhra Pradesh have demanded a price of ₹3,500 a tonne of cane for 2013-14 and removal of Value Added Tax of five per cent on sugar. They have opposed the Centre’s decision to fix the cane price at ₹2,100 for a recovery of 9.5 per cent. They argue that farmers are ending up with a loss of ₹21,000 for every acre of cane they grow.
The factories give an average price of ₹2,500 a tonne. Sugar industry in the State is facing a severe shortage of cane. That the State is expected to crush 90 lakh tonnes of cane against the installed capacity of 200 lakh tonnes of 40 factories shows the severity of the problem.
“We demand the Central Government encourage consumption of ethanol. This would help both farmers and sugar factories come out of losses. In order to do this, the Government should increase the blend of ethanol in petrol to 20 per cent. They need to declare a price of ₹60 a litre for ethanol,” Bharatiya Kisan Sangh State Vice-President Paryada Anji Reddy said.
The organisation had convened a State-level conference last week where representatives of industry and farmers’ organisations discussed the challenges faced by the sector. The Federation of Sugarcane Growers’ Associations too demanded ₹3,500 a tonne.
“If you pay ₹60 a litre, you can pay farmers ₹4,000-4,500 a tonne,” a BKS resolution said.
“We have made key resolutions to revive the sugarcane sector. We will submit them to the State and Central Governments and to leaders of all political parties in the next few days,” he said.
He pointed out that the Brazilian Government mandated blending of 25 per cent of ethanol, significantly helping the sugarcane sector.
The meeting also called for removal of Value Added Tax (VAT) of 5 per cent on sugar in the State. It pointed out that no other State levies tax on sugar, putting the industry in the State in a disadvantageous position.
State Advisory Price
The Federation of Sugarcane Growers’ Associations has asked the Government to revive the pricing mechanism based on a recovery of 8.5 per cent. “The Government should revive the State Advisory Price of ₹1,000 a tonne. The other sugarcane growing States such as Karnataka, Tamil Nadu, Punjab, Haryana, Uttar Pradesh and Maharashtra are giving SAP to farmers,” N.S.V. Sharma, Secretary of the Federation, told Business Line .
The federation had held a meeting in Vijayawada last week and demanded that the factories fetch the cane from the fields, reducing the additional burden on farmers.
With sugarcane becoming an unviable proposition, farmers are rapidly shifting to other crops such as maize and palm oil to get assured returns, he said.
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