Encouraging developments in Karnataka for sugar Industry

Karnataka is making drip irrigation mandatory in sugarcane cultivation from February 2015. The state government has also asked sugar mills to start crushing sugarcane latest by 30th November

 

Two major decisions have taken place in the last few days in Karnataka state that are expected to have serious follow up action throughout the country, as these are good for the benefit of farmers, particularly in the ailing sugar industry.

 

In a press conference, Karnataka’s Water Resources Minister, MB Patil stated that drip Irrigation would be made mandatory in sugarcane cultivation from February 2015. A few months later, an attempt will be made to see if this can be successfully introduced in the case of paddy also.

 

The government is planning to install drip irrigation system in the fields of 7 lakh sugar cane growers, in a phased manner, covering over 4 lakh hectares of sugar cane fields, spread over a three-year period. This process is estimated to cost Rs4,500 crore. The cost of the projected drip irrigation is said to be Rs40,000 per acre of sugar cane field.

 

Karnataka government would provide Rs10,000 as susbsidy and the sugar mills have agreed to give Rs5,000 per acre. Efforts are being made to obtain Rs5,000 from corporate social responsibility funds, leaving a balance of Rs20,000 to be met by the farmer. When such a proposal is executed on a mass scale, there is no doubt that the cost would come down and banks may be willing to finance farmers so as to reduce the burden and prevent them from taking loans to meet this capital expenditure from blood sucking moneylenders.

 

It is well known that sugar cane is a water-guzzling crop, but by introducing this drip irrigation system, Karnataka expects to save 186 tmcft of water or roughly four times the storage capacity of the Krishnaraja sagar dam. This move would also save energy worth Rs400 crore that is being used to pump water in some areas, according to the minister.

 

The sugar cane cultivation in the state consumed 250 to 330 tmcft of water a year and this system would save water and also make it possible for supplying liquid manure. All these process would effectively increase the acreage yield from 35 tonnes to 65 tonnes an acre. The Minister further stated that this increase in production would bring in additional income to cane growers (estimated annually at Rs7,200 crore) besides helping sugar mills to generate 1,200 MW of additional energy through co-generation. The government is in the process of finalising a business model for installation of drip irrigation system which would have a tripartite agreement among farmers, government and sugar factories.

 

In a separate development, HS Mahadevaprasad, Minister for Cooperation and Sugar, Karnataka, stated that a formula for payment of arrears to farmers has been arrived at a meeting of stakeholders, attended by factory owners and farmers. Sugar mills in the state have now been directed to start crushing sugarcane latest from 30th November, after paying Rs2,100 per tonne as old dues to farmers. They have also been permitted to pay the balance of Rs400 in two instalments, with Rs200 to be paid before end of December this year and the balance Rs200 to be paid, spread over two crop years.

 

Additionally, in response to the plea from South India Sugar Mills Association, the state government has extended tax concessions, for three years, covering road cess, purchase tax and VAT. Such a move, it is hoped will ease their burden in clearing the dues to farmers.

 

Out of 63 sugar mills, 30 have already started crushing cane and others have been warned that action will be taken before them, if they do not start crushing before 30th November, as this will hurt the standing crop that may wither away if not harvested immediately.

 

These are bold steps taken by the Karnataka government. It is hoped that other sugar producers may find them to be useful in handling their sugarcane growers and in expeditiously settling the problems faced by the farmers for such a long time. Drip irrigation is not new to the country, but applying it in this area would be a novel attempt. But this may benefit other crops also in due course.

 

In the meantime, it is imperative that the government takes serious steps to resolve the issue regarding subsidised exports of raw sugar so as to reduce the growing stocks in our godowns, running into millions of tonnes, and directing the increased production of ethanol by the mills, followed by increased blending by the oil companies. Even though oil prices have come down internationally, this is unlikely to last for long, and it is in our interest to depend upon our own natural resources.

 

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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