India's sugar production in 2014-15 crop season is projected at 25-25.5 million tonnes, 4-5% more than last year.
The state government has decided to raise Rs2,000 crore to pay Maharashtra's sugarcane growing farmers the Fair & Remunerative Price (FRP).
What is FRP?
It is a Centre-decided price, like minimum support price. This year, the Centre has fixed an FRP of Rs2,500 per tonne sugarcane. In Maharashtra, sugar mill owners are offering Rs1,800 per tonne because of falling sugar prices. So, the remaining amount has to be paid by the state government to match the Centre-approved FRP.
How does the state plan to get the money?
BJP cooperatives minister Chandrakant Patil said the state has asked the Centre to provide an interest-free loan of Rs2,000 crore for five years. "The raised loan amount will be used to pay farmers the FPR. We have requested the Centre to release the amount as early as possible. We are pursuing the matter seriously," he added.
The demand was made during a meeting on Thursday called by agriculture minister Radhamohan Singh to discuss the sugar crisis with several states' chief ministers.
What's the plan to revive the sugar industry?
Patil said due to excessive production of sugar, its price has been fallen drastically in the market. "The sugar industry is going through difficult times. Sugar factories should be allowed to produce ethanol; the state government is contemplating offering a Rs6 subsidy on per litre production of ethanol. We want to promote ethanol production as that will help the sugar industry come out of the crisis. Besides, it will bring down sugar production by 15% and that will stabilise the prices," Patil added.
Opposition attack
Sugarcane farmers' issue was also discussed and debated in the preceding state legislature assembly session. Opposition parties the Congress and the Nationalist Congress Party (NCP) had criticised the government for ignoring cane growers. NCP group leader and legislator Jayant Patil had also threatened that if the FRP was not given to farmers soon, party members and farmers won't allow BJP ministers to roam outside their houses.
"There is a huge crisis. Farmers are not happy with the government. If the government does not help on time, not only will the sugar industry collapse but it will also have an adverse cascading effect on the other supplementary industries. It will hurt the state economy as well," said the NCP MLA.
India's sugar production in 2014-15 crop season is projected at 25-25.5 million tonnes, 4-5% more than last year.
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