Even as strong postures by sugar factories and farmers rock Uttar Pradesh, Maharashtra and Karnataka, sugar factories in Andhra Pradesh have begun crushing without almost any delay.

It, however, doesn’t mean that factories and farmers are happy. The issues, as existed in other States, do exist in the State. Only, there is no cohesive leadership that can rally around the farmers. With the Government and political parties deeply struck in the bifurcation issue, there is none to look into the issues.

Eight out of the 36 factories have begun crushing and made 1.17 lakh quintals of sugar in the last three weeks. This constitutes a little over one-tenth of the estimated sugar production of 10 lakh quintals for the season.

About two lakh tonnes of cane had been crushed so far. The industry expects to crush 100 lakh tonnes as against the crushing capacity of 1.24 lakh tonnes. The State crushed a record 176 lakh tonnes a few years ago.

If you compare with last year’s figure, you see a slight lag. By now, 11 factories had started crushing, producing 1.47 lakh quintals.

Most of the factories could not start crushing because of successive cyclones that had hit farm activities in the Coastal areas.

Though the crop acreage in Seemandhra region declined, gains in Telangana helped retain last year’s level. The State grows the crop in about 1.76 lakh hectares.

“We are expecting to make 10 lakh quintals of sugar, almost reaching last year’s production. “On an average, the factories are giving Rs 2,600 a tonne of cane,” Bhale Rao, an executive of the Sugar Mills Association of Andhra Pradesh, told Business Line.

The industry claims that the last year’s average was at Rs 2,425 a tonne.

Farmers, however, are not a happy lot. They said they deserve more as the factories additional income in the form of by-products.

Tax burden killing

Sugar factories rue lopsided policies of levying Value-Added Tax (VAT) and the exorbitant tax on exporting molasses to other States. Cashing in on VAT (at Rs 150 a quintal) in Andhra Pradesh, traders from Maharashtra are reportedly dumping sugar, making Yanam (located in Andhra Pradesh but falls under Puducherry jurisdiction) a hub.

“The State Government is collecting Rs 2,500 on a tonne of molasses which has huge demand in Orissa. It has become unviable for us to tap this potential whereas Karnataka is able to grab the market there,” a representative of a sugar factory said on condition of anonymity.


(This article was published on December 1, 2013)
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