Why in news?
Sugarcane farmers in western Maharashtra called off their violent four-day-old agitation, reaching an agreement with sugar mill owners and the government.
What was happening?
- Farmers were protesting against the decision of partial payment of fair and remunerative price (FRP) by mills.
- [FRP is the existing arrangement for the price to be paid to sugarcane farmers by the Sugar Mills and is announced each year by the Centre.]
- Protesters led by the Swabhimani Shetkari Sanghtana had paralysed harvesting and transportation of sugarcane in the region.
- Offices of both cooperative and private sugar mills had been attacked and shut down by farmers.
- Sugarcane trucks on the Pune-Bengaluru highway were stopped.
What is the tussle?
- The Swabhimani Shetkari Sanghtana has consistently opposed the decision of sugar mills to pay the FRP in instalments.
- Sugar farmers had been demanding payment in one go, as the partial payment was unprofitable for them.
- On the other hand, the mills cite financial difficulties, for being unable to make full payment of FRP.
- Maharashtra government’s Commissionerate of Sugar show that until December 31, 2018 mills owed farmers a cumulative of nearly Rs 4,500 crore.
- As many as 74 factories, mostly in the districts of Kolhapur, Sangli and Satara, have still not made any payments to farmers.
- [This region accounts for 60% of Maharashtra’s, and 30% of India’s, sugar production.]
- Taken together, cane dues in the states of Maharashtra and UP have already crossed Rs 11,000 crore, and the arrears are set to peak around April, 2019.
- [These two states, notably, account for almost 75% of the crop grown in the country.]
What ails the sugar mills?
- With assured irrigation and conducive climate, sugar mills in the protest region are able to realise higher amounts of sugar per tonne of cane crushed.
- Notably, the fair and remunerative price (FRP) of cane is linked to its sugar recovery.
- So the average rate payable to farmers here is around Rs 2,850 per tonne net harvesting and transportation charges.
- This is huge compared to Pune or Ahmednagar where farmers get an average net FRP of around Rs 2,200-2,300 per tonne.
- For mills across Maharashtra, the present sugar realisation of Rs 2,900 per quintal would not be enough to meet the production cost of Rs 3,400 per quintal.
- Banks have valued sugar at Rs 3,000 per quintal, and 85% of this would be made available to them as working capital.
- 15% of this amount would go towards meeting expenses like gunny bags, salaries etc.
- This would leave just enough to pay farmers at the rate of Rs 2,300 per tonne of cane.
What is the agreement made now?
- It was agreed that farmers would be given full payment according to the FRP and not partial payment as the mills had been doing.
- Calling off their agitation, farmers in western Maharashtra have given sugar millers and the government two weeks' time.
- This is to arrange funds for making full payment of dues to sugarcane growers in the area.
- Mills have sought from the central and state governments, a bailout package in order to be able to pay farmers.
- Mills ask for the government to provide Rs 500 per tonne as bridge payment to the farmers, while the remaining would be paid by the mills.
- Mills have also asked for the minimum selling price of sugar to be raised to Rs 3,400 from the present Rs 2,900 per quintal.
Source: Indian Express
