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Govt hikes sugarcane prices by 12pc

Sohel Parvez
The government has increased sugarcane purchase prices by 12 percent a quintal in a bid to revive cane farming.
The price hike is meant to give incentives to farmers who are switching from came cultivation to other crops to earn more.
From the coming crushing season, 15 state sugar mills under Bangladesh Sugar and Food Industries Corporation (BSFIC) will buy canes at Tk 250 a quintal (100kg) at the mill gate, up fromTk 222.37 in the previous crushing season.
BSFIC has increased cane prices at its purchasing centres to
Tk244 fromTk217 a year earlier.
"We have increased the prices to encourage farmers to grow sugarcane,” said ABM Khorshed Alam, additional secretary of the industries ministry, which oversees BSFIC.
Sugarcane farming shrank to 2.9 lakh acres in fiscal 2009-10 from 3.12 lakh acres a year earlier. Areas under sugarcane were 4.72 lakh acres in fiscal 1990-91, the highest in two decades.
Production also declined in the same period, according to data from Bangladesh Bureau of Statistics.
The hike in procurement prices of cane came after a lobby-
ing group of sugarcane farmers, Bangladesh Chinikal Aakhchashi Federation, demanded a spike to Tk 120 from Tk 83 per maund (37.32 kg) because of rising productioncosts.
The group also threatened to stop supplying canes to the government mills in the crushing season starting November.
“We are not happy with the price increase. Molasses makers buy canes at higher prices than the government pays,” said Golam Sarwar, president of Chinikal Aakhchashi Federation.
He said the group is yet decide if it will withdraw the previously announced programme of
refraining from supplying canes after the price hike.
“The government mills do not get adequate supply of cane because of low procurement prices,” said Sarwar, cituning that many farmers sell cane to molasses producers and cane-juice makers due to low procurement prices of the state mills.
“Mills will get more sugarcane and utilise their full production capacity if the government pays us higher," he said.
State sugar mills require crushing 26-27 lakh tonnes of cane for full utilisation of their total production capacity of 2.10 lakh tonnes.
But these mills cannot operate
to the fullest of capacity, failing to get enough canes to crush, according to BSFIC Secretary Ferdous Begum.
"We expect sugarcane supply will increase due to the incentive," she said, adding the new price will be effective in the next crushing season.
To produce 1.35 lakh tonnes of sugar, the mills under BSFIC plan to crush 17.96 lakh tonnes of sugarcane in the 2011-12 season, up from 15.82 lakh tonnes in the previous season, the official said.
In fiscal 2010-11, the government sugar mills produced 1 lakh tonnes of sugar, up from 62,000 tonnes a year ago.