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The Consortium of Indian Farmers has sought implementation of a report of the Committee for Agricultural Cost and Pricing, which had recommended creation of a sugar price stabilization fund. Photo: Reuters
The Consortium of Indian Farmers has sought implementation of a report of the Committee for Agricultural Cost and Pricing, which had recommended creation of a sugar price stabilization fund. Photo: Reuters

Supreme Court takes note of farmers’ distress

Saying that it was a true PIL, SC sought responses from the Centre in a farmers' body plea for setting up a stabilization fund for cane farmers

New Delhi: Saying that it was a true public interest litigation (PIL), the Supreme Court on Friday sought responses from the agriculture and consumer affairs ministries in a farmers’ body plea to set up a price/sugar stabilization fund (PSF).

The Central government is supposed to reply within six weeks.

A three-judge bench comprising Chief Justice H.L. Dattu, justices S.A. Bobde and Amitava Roy said that this was the type of case that warranted a PIL.

“This is certainly the kind of case which should come as a PIL. This is a case that the court should entertain as it relates to the plight of farmers," said CJI Dattu.

The Consortium of Indian Farmers Association (CIFA), petitioner in this case, has sought implementation of a report of the Commission for Agricultural Cost and Prices (CACP) for 2015-16, which had given several recommendations, including creation of this stabilization fund and paying to farmers by way of a revenue sharing model (RSM) or fixed and remunerative price (FRP), whichever is higher.

The government fixes cane price each sugar season, referred to as FRP.

Further, CIFA has asked for court directions asking the government to pay farmers the gap between RSM and FRP from the fund, in case RSM is lower than FRP.

CIFA in its petition, which Mint reviewed, said that there are about 40 million sugarcane farmers, who borrow from banks or local moneylenders to continue cane farming. However, they can only recover their investments after months, sometimes years, of wait.

CIFA claimed that sugar mills had to pay about 15,000 crore as arrears to about 7.5 million farmers for 2014-15. For 2012-13 and 2013-14, 1,300 crore remains due.

Fall in sugar prices has also affected the ability of the sugar mills to pay FRP to the farmers. The petition states that Maharashtra and Karnataka have witnessed increased cane farmer suicides.

Mint reported on 6 August that in 158 farmers in Karnataka had committed suicide in July alone, a large number of whom were cane farmers.

“The industry can’t pay the farmers as their revenue realisation has been very poor due to the depressed price of sugar," said Abinash Verma, director general of the Indian Sugar Mills Association, a lobby group.

The Sugar Development Fund is already in place which the government collects from the sugar mills. It arises out of a cess charged on every quintal of sugar sold by the producers— 24 per quintal—which adds to some 600 crore a year.

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