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This refers to “Sugar price to hurt cola majors, biscuit companies” (Business Line, February 23). Sugarcane cultivation in all parts of India has declined drastically over the last year due to the mounting arrears due to the farmers from the mills. The factories are unable to pay higher prices to farmers because sugar prices have been kept artificially low by the Government to curb inflation.

The extremely high weightage given to sugar in the wholesale price indices has not been revised in spite of several representations to the government, resulting in incorrect inflationary percentages.

The report proves what the industry has been stating — 67 per cent of the sugar produced in the country is consumed by the cola and confectionery producers. Why is the sugar industry forced to subsidise them by selling below cost of production?

The poor are taken care of through the PDS, where the sugar mills subsidise the Government by supplying 10 per cent of the sugar at levy price. Whose balance-sheet, therefore, needs to be trimmed — that of the sugar mills or the multinational beverage and confectionery businesses? Why is the sugar industry forced to subsidise the government, the MNCs, conglomerates and the consumer, at its cost and the farmers cost?

Large projects such as power, airports and roads, have a rate of return of 15 per cent built into their costs and passed on to the users to ensure economic viability and remunerative returns to the investors. In the sugar industry, however, the farmer and public shareholders are forced to sacrifice their returns to support these hugely profitable businesses.

The Rs 300-crore loss claimed by the cola companies and other losses stated by the large food industry are, therefore, minuscule compared to their combined revenues and profitability for the year, while it is a tremendous loss for the farmer!

As the situation stands today, the farmers are unwilling to plant cane for the next season if the sugarcane prices are not raised and any further increase in cane price without a corresponding increase in sugar price will completely cripple the sugar industry for the future.

It is time the Government confronted these facts and supported the sugarcane farmers and the industry, or else India will be importing sugar from Brazil in the near future and the average consumer will have to pay Rs 100 per kg!

Rajshree Pathy President, South Indian Sugar Mills Assn

More Stories on : Letters | Beverages | Sugar

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