The Hindu : Karnataka News : Rs. 300-cr. loan to clear growers' dues

Online edition of India's National Newspaper
Tuesday, Dec 28, 2004

Karnataka

Karnataka

Rs. 300-cr. loan to clear growers' dues

By T.S. Ranganna

BANGALORE, DEC. 27. The Department of Sugar has decided to go in for a Rs. 300-crore loan from the All-India Sugar Federation for helping sick sugar factories clear the arrears of sugarcane growers.

Disclosing this to The Hindu, the Minister for Sugar, Amaregowda Patil Bayyapur, said that he had discussed the matter with the Chief Minister, N. Dharam Singh; the Deputy Chief Minister, Siddaramiah, who holds the Finance portfolio; the Cooperation Minister, R.V. Deshpande; and the Industries Minister, P.G.R. Sindhia and they have agreed to the proposal.

Mr. Bayyapur said that the loan carries an interest of 4 per cent. He said that the subject will come up before the Cabinet in a fortnight for approval. More than half of the 46 sugar factories — 22 in the cooperative sector, 21 in the private sector, two in the government sector, and one in the joint sector — were incurring losses because of various reasons such as shortage of sugarcane for crushing owing to drought and the problems arising out of sugar import.

Arrears payment

Mr. Bayyapur said that the Government had paid Rs. 220 crores of Rs. 304 crores arrears this year and there was an arrears of Rs. 267 crores since 2002-03.

Under market borrowing, the factories that take the loan have to pay only 4 per cent interest and the difference will be met by the Union Government. More than doing the normal business for profit, the Government has a social obligation to the people in rural areas, particularly the development of economy and providing employment, and each factory with an investment of Rs. 25 crores and turnover of Rs. 50 crores can help over a lakh of people engaged in agriculture, he said.

A large factory does a turnover of Rs. 300 crores and caters to the needs of many more people, which the State Government cannot do by other means. It was the duty of the Government to intervene to protect the growers from private factories, who pay less for the produce. The Minister said that the crushing of sugar cane that resumed in September will continue and the arrears to the growers will be cleared. Mr. Bayyapur said that he had begun a tour of Belgaum, Mysore, Mandya, Davangere and Bidar districts from December 3 and already visited some sugar factories. A study of the factories will be made, he said and added that the problems of the sugar factories will be solved if the Union Government implemented a majority of the 53 recommendations of the Tuteja Committee. With sugar being decontrolled from October next year, the State will find it easy to sell the product in the open market.

There is a stock of seven lakh tonnes of sugar with the State as against a demand of 10 lakh tonnes here. In the next crushing season, another 10 lakh tonnes will be added to the stock.

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