Chennai: Tamil Nadu's cane farmers are looking to understand the pricing structure for cane in states like Maharashtra and Karnataka where the price of cane is linked to that of the end-product sugar. A select group of farmers are keen on undertaking a trip to one of the states where the market-linked sugarcane pricing mechanism is in operation. In contrast, in Tamil Nadu and Uttar Pradesh, farmers are insulated from the vagaries of the sugar market by a system wherein mills pay farmers a fixed price over and above the Centre's fair and remunerative price (FRP).
“In the last tripartite meeting held about two weeks ago, farmer members had requested that they be facilitated to have an interaction with farmers in these states,“ according to an industry member.
Tamil Nadu had set up a committee comprising government officials, sugar mill executives and farmers to consider implementing the revenue sharing idea but the proposal moved slowly.
The new formula makes farmers stakeholders in the sugar production supply chain: if the sugar price plummets on a global supply glut, they receive lesser on account of pricing pressure, while their remuneration could surpass the FRP if the sweetener sells for more. In either case, sugar mills cannot pay lesser than the floor price of FRP. In Tamil Nadu, sugar mills have not been able to pay the state-advised price (SAP) on account of the huge drop in prices of sugar it reached. 19 a kg a few seasons ago and the debtridden financial situation of most of the private mills. While sugar producers have cleared almost all of the arrears accumulated in terms of the FRP , there are still crores in pending if the SAP is considered.
For mill owners, who have been unable to pay even the FRP few seasons back, the state-advised price seemed an unfair imposition. In multiple statements, the sugar producer community had said categorically that they would not pay the SAP without any fund support from the state government.
“In the last tripartite meeting held about two weeks ago, farmer members had requested that they be facilitated to have an interaction with farmers in these states,“ according to an industry member.
Tamil Nadu had set up a committee comprising government officials, sugar mill executives and farmers to consider implementing the revenue sharing idea but the proposal moved slowly.
The new formula makes farmers stakeholders in the sugar production supply chain: if the sugar price plummets on a global supply glut, they receive lesser on account of pricing pressure, while their remuneration could surpass the FRP if the sweetener sells for more. In either case, sugar mills cannot pay lesser than the floor price of FRP. In Tamil Nadu, sugar mills have not been able to pay the state-advised price (SAP) on account of the huge drop in prices of sugar it reached. 19 a kg a few seasons ago and the debtridden financial situation of most of the private mills. While sugar producers have cleared almost all of the arrears accumulated in terms of the FRP , there are still crores in pending if the SAP is considered.
For mill owners, who have been unable to pay even the FRP few seasons back, the state-advised price seemed an unfair imposition. In multiple statements, the sugar producer community had said categorically that they would not pay the SAP without any fund support from the state government.