Revenue sharing formula does not provide for level-playing field

Sugarcane growers in the North want the Prime Minister to scrap the recommendations of the C. Rangarajan Committee to abolish the State advised price (SAP) mechanism.

Fearing an adverse impact, the farmers feel that the panel has not considered the region’s sub-tropical climate that influences yields and recovery, while recommending the pricing changes.

“The committee has painted sugarcane growers of the entire country with the same brush. The report, if accepted, will push back the North Indian cane growers by 50 years” said V.M. Singh, Convenor of Rashtriya Kisan Mazdoor Sanghathan.

The revenue sharing formula, suggested by the panel is not fair and does not provide for a level-playing field for Northern States, Singh said.

The sugarcane yields are 50-100 per cent higher in the South compared with the North. Also, sugar recovery is higher in the South and varies between 12 and 14 per cent against 8-9.5 per cent in the North. The Rangarajan panel had suggested that 70 per cent of the sugar price be paid to the farmers based on an average of 10.31 per cent sugar recovery.

If the recommendations are implemented, farmers in the North, who have a recovery of nine per cent, will get only 50-55 per cent of sugar price, Singh said.

Further, Singh said that the fair and remunerative price fixed by the Centre should not be applicable to sub-tropical North, where the current system of SAP and cane reservation area should continue.

The panel had recommended doing away with the cane reservation area and the SAP. It had suggested that the Centre will continue to fix the fair and remunerative price linked to nine per cent recovery.

However, the farmer’ body said it has no objection to other recommendations of the panel.

Supporting the cane growers’ cause, former army general V.K. Singh said the farmers’ interest should be protected.

In a letter to the Prime Minister, both V.M. Singh and V.K. Singh said: “In case, the report is not rejected, cane growers of Northern States would gherao Parliament on December 4.”

(This article was published on November 2, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.