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Farmers in Andhra Pradesh are demanding ₹3,500 a tonne for the sugarcane they are supplying to mills during the current season to September.
They want the State Government to scrap the five per cent value-added tax on sugar.
Opposing the Centre’s decision to fix the cane price at ₹2,100 a tonne for a recovery of 9.5 per cent sugar, they contend that they will end up with a loss of ₹21,000 for every acre of cane they have planted.
Mills are paying an average price of ₹ 2,500 a tonne.
The sugar industry in the State is facing severe shortage of cane.
That the State is expected to crush only 90 lakh tonnes of sugarcane against an installed capacity of 200 lakh tonnes in 40 factories is an indication of the severity of the problem.
“We want the Centre to encourage use of ethanol. This will help farmers and sugar factories to tide over the losses. In order to do this, the Government should increase ethanol blending in petrol to 20 per cent. It has to declare a price of ₹60 for a litre for ethanol,” Bharatiya Kisan Sangh State Vice-President Paryada Anji Reddy said.
The organisation 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.
Reddy said that the Brazilian Government has mandated blending of 25 per cent of ethanol.
The meeting pointed out that no other State levies value-added tax on sugar, putting the industry at a disadvantage.
The Federation of Sugarcane Growers’ Associations has asked the State to revive the pricing mechanism based on a recovery of 8.5 per cent sugar.
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