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Spice of the Month
- GS 3 || Economy || Agriculture || Agricultural Prices
Why in News?
- Four day agitation of sugarcane farmers in western Maharashtra has been put to end, by sugar mill owners and the government.
Reasons of The Protest
- The SwabhimaniShetkariSanghtana hasopposed the decision of sugar mills to pay the FRP in installments.
- Sugar farmers were demanding payment in one time, not in the installments, as the partial payment was not proper for them.
- The mills were giving the reasons of financial troubles, for being unable to make full payment of FRP.
- Maharashtra government’s Commissioner of Sugar show that until December 31, 2018 mills owed farmers a cumulative of nearly Rs 4,500 crore.
- As many as 74 factories, mostly in the districts of Kolhapur, Sangli and Satara, have still not made any payments to farmers.
- 60% of Maharashtra’s, and 30% of India’s, sugar production comes from this region.
- Canes are still in the dues in the states of Maharashtra and UP have already crossed Rs.11,000crore, and the arrears are set to peak around April, 2019.
- UP and Maharashtraaccount for almost 75% of the crop grown in the country.
- Fair and remunerative price (FRP) Farmers were protesting against the decision of partial payment by mills.
- FRP is the existing arrangement for the price to be paid to sugarcane farmers by the Sugar Mills and is decided each year by the Centre.
- It was led by the SwabhimaniShetkariSanghtana had marred harvesting and transportation of sugarcane in the domain.
- Offices of cooperative and private sugar mills was attacked and shut down by farmers.
- Sugarcane trucks on the Pune-Bengaluru highway were stopped.
Problems of Sugar Mills
- Sugar mills in the region are able to know now higher amounts of sugar per tons of cane crushed with the assurance of proper climate.
- Notably, the fair and remunerative price (FRP) of cane is linked to its sugar recovery.
- So the average rate payable to farmers here is around Rs 2,850 per ton net harvesting and transportation charges.
- This is huge compared to Pune or Ahmednagar where farmers get an average net FRP of around Rs 2,200-2,300 per ton.
- Mills in Maharashtra, the present sugar realization of Rs 2,900 per quintal would not be enough to meet the production cost of Rs 3,400 per quintal.
- Banks have evaluated sugar at Rs 3,000 per quintal, and 85% of this would be made available to them as working capital.
- 15% of this amount would go towards meeting expenses like gunny bags, salaries etc.
- This would leave just enough to pay farmers at the rate of Rs 2,300 per tons of cane.
- Consent was given to the farmers that farmers would be given full paymentaccording to the FRP and not partial payment as the mills had been doing.
- Ending the agitation, farmers in western Maharashtra have given sugar millers and the government two weeks’ time.
- This is to arrange funds for making full payment of dues to sugarcane growers in the area.
- Mills have askedto the central and state governments, a bailout package in order to be able to pay farmers.
- Mills ask for the government to provide Rs 500 per tonne as bridge payment to the farmers, while the remaining would be paid by the mills.
- Minimum selling price of sugar to be raised to Rs 3,400 from the present Rs 2,900 per quintal for the mills.