Vexed by the Tamil Nadu government’s policies that prevent implementation of the ethanol-blended fuel programme in the State, the Consortium of Indian Farmers Association has filed a Public Interest Litigation in the Madras High Court seeking a remedy.

When the matter came up for hearing today, Chief Justice MM Sundaresh granted the State government time up to June 14 to file its counter.

The ethanol-blended fuel programme (EBP) by the Centre envisages supply of ethanol by sugar mills with distilleries to oil marketing companies to produce ethanol-blended automobile fuel. The additional revenue from ethanol is expected to support sugar mills to pay farmers the sugarcane price.

The petitioner, R Virudhagiri, President of CIFA, said sugar mills across India owe farmers over ₹15,000 crore for the 2014-15 season.

The industry is cash strapped because of continuous low sugar prices in recent years. The price of sugarcane by-products such as molasses, bagasse and spirit, including ethanol, is critical for the viability of the sugar mills and their ability to pay farmers.

CIFA pointed out in its affidavit that the State government, in an order of September 2015, has allowed distilleries to produce just 50 lakh litres of ethanol and conversion of 10 lakh litres of impure spirit against a total requirement of 20.18 crore litres a year.

The order is ‘arbitrary and unreasonable’ and affects the fundamental rights of the sugarcane farmers, CIFA said.

CIFA also said that the State government is “throttling the distilleries in Tamil Nadu with a high VAT (14.5 per cent)” but favours liquor manufacturers. It permits liquor manufacturers to bring in alcohol from other States by paying a CST of just 2 per cent.

Mills in Tamil Nadu have shut down production of potable alcohol because they do not find buyers for the expensive alcohol.

The sugar mills are also denied the Centre’s support because they are not able to participate in the EBP.

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