VIP sugar mill owners fail to pay debt-hit Karnataka farmers

  • Kumar Sambhav Shrivastava, Hindustan Times, New Delhi
  • Updated: Aug 04, 2015 01:56 IST

While the fields are running red in Karnataka’s sugar belt with dozens of farmers deep in debt ending their lives over the past three months, a clutch of mills with links to top politicians from the state has failed to pay up hundreds of crores due to cultivators.

Karnataka’s 65 sugar mills owe Rs 2,238.8 crore to farmers for the past two October-March sugarcane crushing seasons, government data show. HT learnt that a third of this amount is to be paid by factories owned or controlled by leading politicians from the ruling as well as opposition parties.

The list includes horticulture and agro marketing minister Shamanur Shivshankarappa, excise minister Satish Jarkiholi, minister of information and technology SR Patil as well as MP and former sugar minister Prakash Hukkeri.

Apart from leaders of the ruling Congress, former Karnataka ministers from the BJP Murgesh Nirani, Umesh Katti, Gurudappa Nagamarapalli and Balachandra Jarkiholi are among politicians linked to sugar mills that owe farmers money.

Read: Karnataka: Two debt-ridden farmers commit suicide in Mandya

Of the 65 sugar mills in the state, at least 18 are controlled by political leaders, records show. Together, they owe Rs 743.3 crore to the sugarcane farmers which, according to the National Sample Survey Office, amounts to a year’s income of the state’s 70,000 agricultural families.

As per the state’s agriculture commissioner’s data, over 170 farmers have ended their life since April. “More than 60% of the farmers who committed suicide were from the sugarcane belt,” said Kurubur Shantha Kumar, president of the State Sugarcane Growers Association, who asserted that over 100 farmers had ended their lives in the past month alone.

Every year, the Centre decides a fair and remunerative price (FRP) of sugarcane to be paid by mills to farmers. State governments often mandate a price higher than the FRP to appease the community.

While Karnataka set a price of Rs 2,500 per metric ton of sugarcane in 2013-14 against the FRP of Rs 2,200 a ton, it stuck to the Centre-determined rate of Rs 2,200 per ton the next year.

Sugar mills, however, paid a much lower price to farmers, blaming falling sugar rates in domestic as well as international markets, which led to the dues.

Read: With towering debt and tiny profit, it's tough living as a farmer

As per the Sugarcane (Control) Order, 1966, sugar mills are required to pay the government-set price to farmers within 14 days of receiving supply.

“We have initiated action to seize the sugar stock of defaulting mills. We will soon start auctioning it to recover the dues,” said MK Aiyappa, the state’s commissioner for cane development and director of sugar, while he also revealed that the sugar mills got Rs 800 crore in interest-free loans from the Centre and a Rs 1,520-crore grant from the state last year to clear dues.

This year too, the mills are expected to receive Rs 900 crore in interest-free credit from the central government.

State minister Shamanur Shivshankarappa initially denied links to any sugar mills. But when pointed out that company websites, court documents and his election affidavit show him as the chairman of Indian Cane Power Limited, Devanagre Sugars and Shamanur Sugars Ltd that together owe Rs 77.55 crore, the minister said Devanagre and Shamanur had cleared their dues for this year and ICPL for last year.

Information and technology minister SR Patil, whose department’s website declares him the founder president of Bilagi Sugar Mill Limited, said he had no association with the company that has failed to pay Rs 43.48 crore. Other leaders like the BJP’s Parabhakar Kore, Balachandra Jarkiholi, Umesh Katti, JD (S)’s Bandeppa Kashempur and Sanjay Kheny who fought the previous assembly election on a BJP ticket expressed the inability of their sugar mills to pay the dues.

“I have not made any profit for the past two years. Despite losses, I managed to clear farmers due as per the FRP but not according to the state’s rate last year. This year the sugar prices have come down even further, so none of the mills could even pay the FRP,” Katti said.

Congress MLA Eshwara Khandre, whose father and ex-minister Bheemanna Khandre is the chairman of Mahatma Gandhi Cooperative Sugar Factory, denied any association with the mill that owes Rs 35.16 crore to farmers. Other politicians associated with defaulting mills did not answer calls from HT.

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