90 lakh tonne excess sugarcane a problem for factories

KOLHAPUR: Debt-ridden sugar factories in the state are facing a rise in the estimated sugarcane production for the crushing season.
Though the sugar commissionerate has asked the factories to start the crushing season by October 15, many sugar factories have not made the complete payment of sugarcane purchased and they are likely to face stiff opposition from farmers' organizations.
The estimated sugarcane production is 850 lakh tonne, an increase of some 90 lakh tonne as against the sugarcane crushed in the 2013-14 crushing season.
A senior official from The Maharashtra State Federation of Cooperative Sugar Factories Ltd said sugar factories are facing a financial crisis. It is still unclear how many sugar factories can crush such increased production of sugarcane.
On the other hand, the state assembly elections are likely to be at the beginning of the sugarcane season; hence factories will face political pressure as well. Most factories are associated with Congress and Nationalist Congress Party.
Raju Shetty, member of Parliament and a prominent leader of sugarcane cultivators from Kolhapur, said, “The factories will face a major challenge because many of them have not made full payment of sugarcane purchased to farmers. I have been agitating and protesting every year for better prices. Sugar factories may point at sluggish market trends, but my demand of better pricing for sugarcane cultivators will not be compromised.”
The state sugar factories in 2013-14 have produced 78 lakh tonne sugar. This year, the production is likely to reach 90 lakh tonne.
Shetty pointed out that his party workers have already started agitating against local sugar factories in western Maharashtra over non-payment of the second instalment of last year’s crushing season. The Union government every year announces a fair and remunerative price, a mandatory base price for sugarcane purchase for factories. The factories can pay a higher than the FRP, but it takes a week-long agitation for factories to accept the higher price formula.
A delegation of sugar factories from the state had met Union food and civil supply minister Ram Vilas Paswan over the critical financial condition of sugar factories.
Sugar factories have already received financial assistance of Rs 60,000 crore in the last year, anticipating that their condition could improve, but the sugar rates in the international as well as in domestic market remained moderate, affecting the income of sugar factories.
It was expected that sugar prices in the wholesale market may cross Rs 3,000 per quintal mark, but the prices were hovering at Rs 2,800 per quintal. Such low prices at international level discouraged export as well. Only one lakh tonne sugar is exported during the last season, when factories in the state have produced 78 lakh tonne sugar.
The Maharashtra State Federation of Cooperative Sugar Factories Ltd has submitted a proposal to the state government over providing some financial assistance as it is facing short margin problem. When the production cost and sales cost of sugar is very thin, the short margin is not sufficient for the management to bear the operational cost of the sugar factory, salaries of the employees among others.
Raghunath Patil, another leader of sugarcane farmers has also demanded implementation of recommendations of C Rangarajan committee which has proposed payment of 70% income from the cumulative earnings from sugarcane processing such as sugar, molasses, ethanol, rectified spirit, power generation to farmers.