The Hindu : Karnataka / Bangalore News : Another agrarian problem looms over Karnataka

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Thursday, Jan 17, 2008
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Karnataka

Karnataka - Bangalore

Another agrarian problem looms over Karnataka

Nagesh Prabhu

BANGALORE: A fresh agrarian problem looms over the State this season, threatening to push sugarcane growers into a financial crisis.

The farmers are a worried lot with poor prospects of their sugarcane making way to the sugar factories. Following a favourable monsoon and better pest management, there is a glut in sugarcane production but not a commensurate crushing capacity.

The increase in production is also attributed to a steep rise in the area under sugarcane — up to 3.65 lakh hectares in 2007 from around 2.15 lakh hectares a decade ago.

The State, which is the third largest producer of sugarcane after Uttar Pradesh and Maharashtra, has produced nearly 350 lakh tonnes of sugarcane in the last kharif season.

Slump in the sugar prices in the global market and low crushing capacity of factories have added to the growers’ problem. However, Governor Rameshwar Thakur has said that the Government would announce a relief package in a few days to bail out the growers.

According to official sources, 46 factories, both joint ventures and cooperatives, had a crushing capacity of 1.4 lakh tonnes a day. The liquidity position of factories has become critical and cooperative units have not yet cleared arrears of Rs. 142 crore to growers for the sugarcane supplied last season.

Industry sources said with the high cost of borrowings and sugarcane crushing, factories are finding it difficult to raise finance for their operations.

The growers had been demanding Rs. 1,200 a tonne of sugarcane against the minimum support price of Rs. 811 fixed by the Union Government for 2007-08. The factories had paid Rs. 1,100 a tonne during the last season. The sugar factories have been demanding more liberal financial support from the Government and permission to transport molasses outside the State.

The industry sources said the performance of the factories, particularly in the cooperative sector, was poor due to under-utilisation of capacity, ineffective machinery and poor management.

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