Sugar: Can’t sell, can’t buy, Karnataka government in a fix
Bengaluru: Has Chief Minister Siddaramaiah’s decision to seize sugar stocks from factories, sell them and settle the pending dues of farmers in distress, dragged the government into a bigger crisis than resolving it? What if annoyed sugar factories on which farmers rely for purchasing their sugarcane crop, refuse to buy sugarcane from them next season?
A highly placed source in the government said that to please farmers, the government seized sugar stocks piled up in private sugar mills. Private sugar mills may take sweet revenge by not buying cane in the next season. If this happens, the state will face an unprecedented crisis, said the sources adding that a few sugar mill owners have hinted that they will teach the government a lesson next season for forcefully taking over their stocks.
"Last year, sugarcane output stood at 75 lakh metric tons which is expected to reach 1.25 crore tons this year and go up to nearly 2 crore tons next year. It is impossible to ignore sugar factor owners, the government must ensure the crushing of cane begins in time," the source explained.
Realising the gravity of the situation, the chief minister held a meeting with senior colleagues to win their support so that he can take on the opposition confidently. Ministers led by energy minister, D. K. Shivakumar reportedly suggested that party leaders and the government should launch a widespread campaign to highlight the newfound bonhomie between JD(S) and BJP and also explain steps taken to pay subsidy to sugarcane farmers since 2013.
The ruling party has decided to expose the ‘hollow’ bonhomie between the Janata Dal (S) and BJP, clear ‘misgivings’ about the payment of more than Rs 1,600 crore made to sugarcane farmers soon after farmer Vittal Arabhavi committed suicide in front of Suvarna Vidhana Soudha in 2013 and lastly, go slow in auctioning sugar stocks seized from the factories.
Mills shy away, will government pay farmers?
Following pressure from the opposition, the state government is said to be considering paying Rs 200 per tonne as incentive to sugarcane farmers from its coffers since private mill owners have expressed their inability to pay in view of the sharp decline in the sugar prices. According to sources, Chief Minister Siddaramaiah held discussions with senior officers of the department of finance regarding payment of Rs 925 crore due to farmers by private sugar mills for 2013-14.
The CM wanted to know if it was possible to pay Rs 925 crore as immediate relief following reports of farmer suicide over delay in payment of dues. Mr Siddaramaiah has also reportedly directed officials to disburse the dues to farmers and repay these loans after auctioning sugar seized from sugar mills. Sources said till date, the government had seized 7.41 lakh tonnes of sugar from 28 sugar factories as against the total of 31 lakh tonnes to be seized.
More than the seizure, the biggest problem had been disposal of stock as sugar prices are declining in domestic and international market. Besides, the present weather conditions are not conducive to retain sugar stocks as its quality could deteriorate. The other major problem is finding buyers. Auctioning of sugar will not fetch the amount needed to repay the dues of farmers.
Sources close to co-operation and sugar minister H.S. Mahadevprasad told Deccan Chronicle that in case of a further decline in sugar prices, government is planning to direct a few departments to buy sugar compulsorily.
