Going by the practice, the sugar mill operators should have already unveiled their offer prices by now. If the farmers had then failed to agree on the price, it would have been fixed through government-mediated negotiations between the Sugarcane Producing Farmers Federation (SPFF) and the Sugar Mills Association (SPA). [break]
However, this year, the SPA has not yet announced its offer price. As the harvest season began a month ago, farmers, who cultivate sugarcane as cash crops and rely on payments to fulfill their basic needs, were forced to sell their harvest to the mills.
“Last year, we had started receiving payment within a fortnight of the crushing season. This year more than three weeks have already passed since crushing began and still the mills have given no indication on extending payments,” said Ran Narayan Yadav, a sugarcane farmer of Maheshpura, Bara.
Referring to data of Reliance Sugar and Chemical Industry, which accepted supply from local sugarcane farmers, he said hundreds of farmers in Bara have already sold 280,000 quintals of sugarcane to the sugar mill. But they are yet to receive payment.
Officials at Reliance Sugar and Chemical Industry based in Manaharwa-6, Bara, agreed with what Yadav said. However, they said they could not release payments because the SPA has not announced the rate.
“Existing practice does not allow us to fix the rate individually. It has to be decided by the SPA. And as the SPA has not taken any decision in this regard, we cannot release payment to farmers,” said Shiva Nath Sharma, general manager of Reliance Sugar and Chemical Industry.
Mills operators told Republica that the talks were on to fix the price though.
According to the operators, the SPA has verbally floated an offer to fix the sugarcane price at Rs 483 per quintal for this season. However, the SPFF has asked for a higher rate.
“Last year, we agreed at a rate of Rs 411.50 per quintal because wholesale price of sugar at that time was Rs 54 per kg. This year the wholesale price stands at Rs 69, which is almost 28 percent higher than last year´s. Hence, we have asked for raise by similar proportion,” said Birendra Kushwaha, president of the SPFF, Bara.
The SPA, on the other hand, has argued that it cannot raise the price by that extent as mills will not be able to sustain it. “If we do that, it will simply cause the wholesale price of locally produced sugar to go up further, making it uncompetitive in front of imported supply,” said a mill operator.
“Negotiations are going on. Hopefully, the rate will be decided soon,” Sharma stated.
There are 10 sugar factories, including Reliance Sugar and Chemical Industry, Shreeram Sugar Mill, Indu-Shankar Sugar Mill, Lumbini Sugar Factory and Everest Sugar Mill, among others, operating in the Tarai districts. Fixing of the sugarcane price is crucial for them to kick off full-fledged crushing.
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