Reeling under the impact of depressed sugar prices and high cane costs, mills in Karnataka – the third largest sweetener producer in the country – have urged the State Government to come to their rescue by providing some financial support on the lines of neighbouring Maharashtra.

Industry officials said Maharashtra has extended a loan of ₹2,000 crore to millers to pay the fair and remunerative price (FRP) to cane growers in the State.

It has also waived the purchase tax and providing an enhanced raw sugar export subsidy of ₹1,000 a tonne in addition to the incentive of ₹4,000 announced by the Centre.

“We urge the Government to consider providing some support to help us clear cane arrears and prepare ourselves to at least start the next crushing season from October,” said Pavan Kumar, President of Karnataka chapter of the South India Sugar Mills Association.

The industry feels that the next year’s cane crop is bigger than the current season and that the output is likely to be higher.

‘Review FRP’ “The Government should provide a subsidy of ₹400/tonne of cane to clear the arrears,” said Jagadeesh Gudagunti, Chairman and Managing Director, Sri Prabhulingeshwara Sugars and Chemicals Ltd. He further said that the FRP of ₹230 for 2015-16 season announced by the Government need to be reviewed in the context of the prevailing prices of sugar, which is much below the production costs.

Pending payments Sugar mills in Karnataka owe about ₹3,600 crore to the growers for the current 2014-15 season, while the Government has pegged the arrears pending from the 2013-14 season at ₹900 crore. However, the industry maintained that the mills have paid the price fixed by the State Government for the 2013-14 season. Vidya Murkumbi, chairperson, Shree Renuka Sugars, said the millers are finding it difficult even to extend the advances for the agents that arrange harvesting labour for the ensuing season.

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