Talks fail, Karnataka government to auction Rs 6,000 crore worth seized sugar

Bengaluru: With talks with the managements and chairmen of private and co-operative sugar mills failing, the state government has decided to issue recovery certificates to seize the stocks of sugar from factories that have defaulted in paying Rs 200 per tonne to farmers for the year 2014-15. The total seizure of sugar would be around 30 lakh metric tonnes worth around Rs 6,000 crores.

CM Siddaramaiah had convened a meeting with sugar mills owners and representatives to break the deadlock over the issue of payment of Rs 200 to farmers, at ‘Krishna’ on Wednesday. The two-hour long meeting failed to arrive at a consensus as the mill owners flately refused to pay up in the wake of drop in the prices of sugar in the domestic and international market.

Co-Operation and sugar minister Mahadevaprasad said mill owners expressed their inability to pay the dues of Rs 925 crore to farmers and failed to come out with a clear-cut decision.

So, the government told them about the consequences like issuing recovery certificates and seizure of sugar stock from their mills for the amount they owe to sugarcane growers. Already, deputy commissioners of Belagavi and Bagalkot had been issuing recovery certificates and the other deputy commissioners would follow suit from tomorrow.

“Although it will be a ‘distress sale’ the government will do it to recover money and distribute it among farmers.” A meeting of the Sugar Price Control Board would be held on Thursday to work out the future course of action.