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State Advised Price for cane revived

S. Vydhianathan

Private mills say the new price will affect their finances

CHENNAI: : After four years, the State Government has revived the State Advised Price (SAP) for sugar cane supplied by registered farmers to mills.

Until 2001, the Government used to announce its own procurement price for sugar cane farmers. It was over and above the minimum support price (MSP) fixed by the Centre. The State had justified its decision to give up the SAP, citing the accumulated losses of 16 cooperative and three public sector sugar mills, which were of the order of Rs. 800 crores.

In a White Paper on the finances of the cooperative mills presented in the Assembly, the Government had said that the main reason for the losses was the high SAP, despite the poor sugar recovery rate.

The Chief Minister's announcement of Rs. 1,014 a tonne linked to 9 per cent recovery as against the Centre's minimum support price of Rs. 795 more than met the expectation of farmers. While the farmers welcomed the new price which, they said, was long due, the private mills contended that the announcement did not cover them.

The farmers said though they had been demanding Rs. 1000 a tonne for 8.5 per cent of recovery, the Government sanctioned Rs. 1,014 and an additional price for recovery above 9 per cent. They wanted the Government to ensure the new price was paid to farmers without delay.

But the private mill managements said they were not bound to give the price as they had obtained a stay against the State's intervention in fixing the procurement price. It was difficult to pay the price as the mills, which had been in a difficult financial position a few years ago, had started generating more revenue only now, thanks to the increase in sugar price in international and local markets. The new price would set the clock back.

The mill managements said the percentage of recovery in Tamil Nadu was lower than other States, while the procurement price was higher. According to the Government's announcement even if the recovery was less than 9 per cent the farmers would get Rs. 1,014. This would affect the finances of the mills, they added.

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