Profit-sharing formula in sugarcane pricing introduced in Belagavi district of Karnataka farmers
This initiative succeeded in breaking the deadlock between sugarcane farmers and factories, allowing commencement of operations in sugar factories
The Belagavi district administration in Karnataka has introduced a profit-sharing formula for sugarcane pricing during the current crushing season. This new formula aims to resolve the ongoing disagreement between sugarcane farmers and sugar factories. District In-charge minister Satish Jarkiholi claims it is the first of its kind in the country, as per the C Rangarajan committee recommendations.
Most farmers' leaders have accepted the formula and suspended their protests. However, some leaders, such as Shashikant Padasalagi Guruji, expressed dissatisfaction, stating the formula relies heavily on the union government's efforts to revise the Minimum Selling Price of sugar.
The profit-sharing formula is based on the understanding that farmers are both raw material suppliers and shareholders of factories. Farmers will receive a base price above the Fair and Remunerative Price fixed by the union government, along with an additional amount as profit. The profit will be divided, with 75% going to the farmers and 25% to the factory.
The first instalment of ₹3,500 per tonne will be paid immediately, followed by a second instalment of ₹100 once the crushing season concludes. Additional payments will depend on the sugar market price, with the final instalment calculated based on the average market price of sugar exceeding ₹45 per kg before the start of the crushing season.
The agreement also specifies a pricing structure: if the average sugar price is ₹48 per kg, the sugarcane price will be ₹3,650 per tonne; at ₹49, it will be ₹3,750; at ₹50, it will be ₹3,850; and at ₹55, it will be ₹4,350. After deducting the already paid ₹3,600, the remaining surplus will be shared, with 75% going to the farmers and 25% to the sugar factories.
The minister stated that factories would be motivated to share profits if the union government fixes an MSP higher than the current one at Rs 31 per kilogram. Critics argue that the formula is speculative and depends on the union government's revision of the Minimum Selling Price of sugar.
Written by urgent.news from The Hindu's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
