All sugar factories cannot pay same price to farmers, says Satish Jarkiholi

“All factories cannot pay same price to sugarcane farmers. Sugarcane procurement prices depend on various factors like the quality of the crop, sugar recovery percentage, prevailing market price of sugar and the financial condition of the sugar factory,” Minister Satish Jarkiholi, who is also a sugar factory owner, said in Belagavi on Saturday.

He told reporters that the demand for uniform pricing for sugarcane across the State is natural and understandable.

“But, it is impractical. A factory with better financial health can usually pay higher prices to farmers compared to a factory that is suffering losses or is under a huge debt burden. Climatic factors also contribute. Farmers should understand that prices can differ from factory to factory and district to district,” he said.

“Our objective is to ensure that sugarcane growers receive a fair price. We have no objection if sugar factories that possess the financial capacity to pay a higher rate choose to do so. However, the financial condition of all sugar factories is not the same,” he said.

“Factories are offering varying rates not only in Belagavi district but also in Kalaburagi and Haveri districts. But that is a natural phenomenon, especially in a drought year,” he said.

“Factories that are in a position to pay a higher rate should do so. We have no opposition to this. We held several rounds of meetings with farmers and factory owners to arrive at the base price of ₹3,600 per tonne and the profit-sharing formula. This ensures additional payments to farmers if sugar prices rise. Based on this, the factories have now announced their respective rates. However, some factories are offering prices higher than this, as they want to compete with others and ensure optimum stocks,” he said.

“The yields are low this year, due to the dry spell. In Maharashtra, there has long been a practice of offering higher prices than in Karnataka. Factories there have consistently paid farmers better rates. Some farmers are comparing the prices offered by factories in Karnataka against those in Maharashtra,” he said.

“The main issue plaguing the sugar industry is the low price of sugar in the market. This is crippling the finances of the factories which are unable to pay better prices to sugarcane growers. Things will improve if the Centre hikes Minimum Selling Price of sugar. The Union government has formed a committee to examine the demand for a hike in Minimum Selling Price. The committee needs to review the farmers demands and take an appropriate decision. The crucial point is that the Union government should take the final decision. It is crucial,” he said.