Karnataka sugar factories may have to share profits from byproducts with farmers

When farmers staging protest demanding better price from sugarcane has become a common phenomenon in recent years, the Karnataka government is now planning to introduce a revenue sharing formula for sugar factories and farmers under which sugar factories share a portion of their profit from byproducts with the farmers.

A five-member expert committee formed to study the income of sugar factories through byproducts, and pros and cons of fixing additional amount above the fair and remunerative price (FRP) for sugarcane has completed its study. Based on the findings of the committee, Sugar Minister Shankar Patil Munenakoppa has called a meeting of sugar factory owners, in Bengaluru on Thursday (November 24), to discuss about the formula to share the profit from byproducts with farmers.

"We will request sugar factory owners to share some percentage of their profit from byproducts like ethanol, spirit, bagasse and co-generation with cane growers, as factories operate because of farmers only. If they do not agree, we will consult the chief minister and think about bringing a law to introduce this byproducts' profit sharing system," said Sugar Minister Shankar Patil Munenakoppa.

Stating that most of the sugar factories are not getting profit due to sugar production alone and there is a provision to share sugar production profit with farmers, he said, factories did not show the profit from byproducts so far. If some portion of their profit from byproducts is shared with farmers, it would be a relief for farmers who are demanding additional amount on the FRP, he told DH.

Out of 72 functioning sugar factories in the State, 34 factories have the licence to produce byproducts, Munenakoppa added.

Munenakoppa also informed that there are requests seeking permission to open 44 new sugar factories in the State, and Dharwad district may get four factories.

Claiming that the government has ensured that payment as per the FRP to farmers is not pending by any sugar factory in last two years, he said, all sugar factories in the State have now started crushing sugarcane. Farmers' demand for increase in the FRP would also be brought to the notice of the Union Government, he added.

There was a complaint that Nirani sugar factory did not pay the additional amount above the FRP as promised, and the factory management has assured to pay that, Munenakoppa said.