Punjab govt to pay Rs 25 per quintal directly to cane farmers

Ruchika M Khanna 
Tribune News Service 
Chandigarh, December 5 

The protest by Punjab cane farmers, which saw major highways in Doaba and Majha being blocked, was called off today after the Punjab Government struck a deal with private sugar mills, costing the state exchequer about Rs 230 crore. 

However, it will still take another three or four days for crushing at the mills to begin as most are yet to obtain a licence to start operations. 

The government, conceding to the demand of private sugar mills, owned by leaders from across the political spectrum, decided to pay a part of the State Advised Price (SAP) — Rs 25 per quintal — to the farmers. Vishwajit Khanna, Additional Chief Secretary (Development), said the decision had been taken as wholesale sugar prices had crashed to Rs 2,900 per quintal. “The private mills said they were unable to buy cane at Rs 310 per quintal, use their own resources to produce sugar and then sell it at Rs 2,900 per quintal,” he said.

The mill owners had been adamant on being paid Rs 35 per quintal as subsidy, if the government wanted the mills to pay the SAP (Rs 295, Rs 300 and Rs 310 per quintal) to cane growers. 

According to the deal, the private mills, which have a 70 per cent crushing capacity, will pay Rs 285 per quintal (early yielding),  Rs 275 (mid-varieties) and Rs 270 (late varieties) to the farmers. They will thus bear Rs 10 per quintal differential between the SAP and Fair and Remunerative Price (FRP — Rs 275, Rs 265 and Rs 260 per quintal). 

These private mills need to clear farmers’ dues amounting to Rs 192 crore since the last crushing season (2017-18). The government announced they would release a sum of Rs 67 crore in phases to those farmers supplying cane to their mills. The state government is committed to paying this amount as interest for a soft loan of Rs 200 crore taken by the mills in 2015-16 on the asking of the then SAD- BJP government. At that time, too, the sugar prices had crashed and the government had given a subsidy of Rs 50 per quintal to the private mills.    

With farmers on the warpath, informal meetings were held between private mill owners and Punjab Rural Development Minister Tript Rajinder Singh Bajwa in Chandigarh at the residence of former minister Rana Gurjit Singh, whose family owns a sugar mill at Buttar Sevian, Amritsar. A pact was reached and the CM informed. Subsequently, officers of the Agriculture, Cooperatives and Finance Departments met representatives of the Punjab Private Sugar Mills Association where a formal announcement on the subsidy was made.