Financial Daily from THE HINDU group of publications
Thursday, Oct 06, 2005
Financial Daily from THE HINDU group of publications Thursday, Oct 06, 2005 |
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Agri-Biz & Commodities
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Agricultural Policy Industry & Economy - Sugar Meeting today; TN sugar mills hope for SAP support package R. Balaji
Chennai , Oct. 5 THE private sector sugar mills inTamil Nadu hopes that the State Government will come out with a support package or concession to help them pay the sugarcane price fixed by it. The private sector sugar mills feel that the State advised price (SAP) of Rs 1,014 a tonne linked to 9 per cent for the 2005-06 season is not affordable. The Centre had fixed the statutory minimum price at Rs 795 a tonne and the State Government has hiked the base price by an additional Rs 219. The State Government's move caught the private sector mills by surprise when it announced the SAP mid-September. The private sector mills had each been fixing sugarcane prices in the last four years through direct negotiations with farmers. The SAP had last been announced for the private mills in 2000-01 after which the issue had been taken to court by the private mills. Since then the State Government's SAP, whenever announced, covered only the cooperative and public sector mills. However, in May 2004, a Supreme Court ruling said that the State governments have the authority to play a role in fixing sugarcane prices. Also, once the farmers and millers agree on the price, the State Government can enforce that agreement. Under the new SAP, the private mills estimate that the additional cost due to sugarcane would be about Rs 400 crore to the private sector. The Government has announced a Rs 75 crore support package to the cooperative and public sector mills to help them bear the additional expense of Rs 134 crore due to the SAP. The private sector is, however, dismayed with the re-entry of the State Government in fixing sugarcane prices for the private sector mills. They see this move as a retrograde step that sets the industry back several years just when it has smoothened out sugarcane pricing through direct negotiations with farmers. The private sector mills, represented by the South Indian Sugar Mills Association, will discuss tomorrow the sugarcane pricing issue with the State Government authorities.
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