Bidar: Sugar factories cannot survive by producing only sugar. Production of ethanol and other by-products should be made compulsory for the units' survival, Bidar Sahakari Sakkare Karakhane president Ishwar Khandre said here on Saturday.

Mr. Khandre was speaking at the Gulbarga division-level sugarcane growers' conference organised by the Confederation of Indian Farmers' Associations. He said the production of ethanol, power generation, manufacturing of paper or bio-fertiliser would be lucrative and the benefits would reach farmers.

Payment problems

Sugar factories had been facing an allegation that they did not pay their suppliers well. Farmers should realise that factories were not responsible for the low price they paid to sugarcane growers. Wrong government policies were responsible for this. "No government policies or laws are pro-farmers or pro-sugar factories. If the present policies and laws continue, the sugar industry will never grow," Mr. Khandre said.

He said that if the Government changed its policies, it was not difficult to fulfil farmers' demand of paying Rs. 1,600 a tonne of sugarcane supplied. He criticised the Government for collecting huge taxes from sugar factories but not coming to their aid when they were in trouble.

He said wrong policies of the Government, made without consulting farmers, had created many problems for sugarcane growers. The Government-controlled how much sugarcane should be grown in the country, how much sugar should be produced, when it should be sold and at what price.

He said although his factory produced 1.1 lakh tonnes of sugar every month, the Government only allowed the sale of 25,000 quintals per month. The Government took six months to permit factories to sell sugar. This quota was not increased even if the factory increased production. How can the sugar industry grow with so many limitations, he asked. The Government bought 10 per cent of the production at a price that was 30 per cent lower than the market price. He said that while every government policy was changed to suit the liberalised environment, the levy policy that was 40 years old, had remained unchanged.

Added to this was the problem of working capital. Commercial banks did not provide loans to cooperative factories and the Reserve Bank of India guidelines made it difficult for sugar factories to obtain loans from cooperative banks.

"These banks do not give loans till we mortgage sugar with them. Even then, they charge an interest of 13 to 16 per cent on loans. Our factory alone pays Rs. 4 crore a year as interest to co-operative lending agencies. If the interest rate was fixed at 4 per cent, then factories would considerably increase the price of sugarcane they buy," he said.

He demanded the Centre and the State Government to reduce the tax on sugar and molasses. CIFA secretary Prabhakar Reddy, Karnataka Rajya Raitha Sangha president Basavaraj Tambake, and senior leader Kuruboor Shantakumar were present.

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