The Hindu Business Line : TN sugarcane growers demand Rs 2,500/t

Chennai, Sept. 21 Farmers in Tamil Nadu are demanding an “ex-farm” sugarcane price of Rs 2,500 a tonne for 2009-10 – more than two-fold increase over current year’s price.

Effectively, the farmers want sugar mills to take over the cost of harvesting and transport, which would mean an additional benefit of up to Rs 300-400 a tonne to the farmer.

Sugar mills – facing a steep drop in sugarcane availability – are hoping that sugarcane price would be controlled at viable levels.

Sugar mill representatives said there is a need to fix a flat price for sugarcane rather than linking it to sugar recovery, a system in vogue for decades now.

Farmers’ representatives and sugar mills are to represent their cases on Tuesday at a tripartite meeting, in the presence of Government officials.

At a meeting of the farmers association representatives of private sector and cooperative sector sugar mills organised by the Consortium of Indian Farmers Associations, the farmers decided to demand Rs 2,500 a tonne ex-farm for the coming season against Rs 1,150 a tonne paid for the 2008-09 season.

Dip in availability

The demand comes against the backdrop of a sharp decrease in sugarcane availability and steep increase in sugar prices.

However, the mills are facing a severe shortage of sugarcane availability as farmers have switched to crops that are more remunerative and can be harvested faster. Initial estimates for 2009-10 peg sugarcane availability at about 130 lakh tonnes against current season’s 150 lakh tonnes – a sharp drop over last year’s cane output.

Sugar prices, the farmers pointed out, has increased from Rs 16 a kg ex-factory to over Rs 30.

LINKING RECOVERY

Farmers are also opposed to the Centre linking the basic sugarcane price to higher sugar recoveries. In the last few years, the basic price of sugarcane, which was linked to 8.5 per cent sugar recovery, has been progressively changed and has now been linked to a recovery of 9.5 per cent. Also, the system to compute sugarcane prices has been changed to take into account the average recovery of the season rather than the peak period recovery.

Farmers are demanding that the sugarcane price be linked to 8.5 per cent recovery. A higher recovery would enable them to get an incentive price for sugarcane.

Meanwhile, sugar mill representatives point out that in the last five years the average recovery in the State has never crossed 9.5 per cent for most of the mills. So the farmers have not had the benefit of a premium pricing for sugarcane. Sugar mills also need the option of switching over to ethanol or rectified spirit production directly from cane juice and under conditions of low sugarcane availability the mills need leg room to offer subsidy to farmers.

Mills also hope to urge the State Government to grant farmers capital subsidy to purchase harvesters in view of steep increase in labour costs.