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TN: Agriculture Budget Disappoints Sugarcane Farmers, Revival of Sugar Mills Unaddressed

Neelambaran A |
The farmers' organisations have demanded the state government launch an insurance company of its own since the profit of insurance companies is increasing though the farmers are not receiving adequate compensation for crop loss.
Sugarcane farming

Representational image. | Image courtesy: needpix

Despite several positive measures, a section of the farming community, particularly the sugarcane farmers, are left disappointed by the Tamil Nadu agriculture budget presented on February 20. The incentive for sugarcane was increased by just Rs 20 per ton, an increase to Rs 215 from Rs 195 during 2023-24. 

The sugar mills will pay the farmers a Fair and Remunerative Price (FRP), and the incentive will be paid directly to the farmers by the state government. The farmers will get Rs 3,131 per ton, much lower than the promise of Rs 4,000 per ton by the Dravida Munnetra Kazhagam (DMK) ahead of the 2021 assembly elections. 

The demand of the farmers, including the revamping of the three cooperative sugar mills, now being closed, and the state government's launch of an insurance company to ensure fair compensation also didn't see light in the much-anticipated budget. 

The Tamil Nadu Vivasayigal Sangam (state unit of the All India Kisan Sabha) has raised concerns over the budget retaining the procurement price of paddy, even as the input costs continue to increase. Meanwhile, the organisation has welcomed the allocation of Rs 42,281 crores for agriculture and related departments.


The DMK government introduced a separate agriculture budget after assuming power in the state in 2021. The budget, the fourth exclusive agriculture budget, was presented by the minister for agriculture and farmers welfare M R K Panner Selvam. The total allocation was increased by Rs 3,337 crores during the current fiscal. 

Several measures, including a focus on sustainable practices, the allocation for natural farming and Rs 16,500 for cooperative banks for providing agriculture loans, received widespread appreciation from all sections of the farmers. 

However, the farmers' organisations have expressed disappointment over the minor increase in the incentive for sugarcane. 

Speaking to NewsClick, P Shanmugam, the state president of the All India Kisan Sabha (AIKS), said, “The increase in incentive for one ton of sugarcane is just Rs 20, even as the production cost is increasing. The DMK had promised to increase the price to Rs 4,000 per ton, but with a minor increase in the successive years, the farmers would continue to suffer.”

The state government will transfer the incentive amount directly to the bank account of the farmers, while the FRP will be paid to the farmers by the Sugar Mills.

The fate of three cooperative sugar mills now closed for several reasons, remains inconclusive as the budget has not touched the issues. “We expected the state government to address the problems of the cooperative sugar mills. The Tirutanni mills could have been revived if Rs 65 crores were allocated for the purchase of new machinery to bring the mill back to operation,” Shanmugam said. 


Another major issue flagged by the farmers is the pending demand for an insurance company by the state government, given the lower compensation received by the farmers even as the profits of the insurance companies increase every year. 

“The farmers are not getting adequate compensation despite paying a high premium every year, whereas the profits of the insurance companies are continuously increasing. The farmers have been putting forward the proposal of beginning an insurance company to benefit the farmers and save money for the state government,” Shanmugam said. 

The paddy farmers have also raised concerns about the stagnation of paddy procurement prices, while the farmers have demanded Rs 3,000. The AIKS has been urging the DMK government to fulfil its electoral promises.

The AIKS has welcomed the increase in budget outlay, establishment of the infrastructure of direct procurement centres, the allocation for climate change mitigation, and further establishment of farmers' markets and other farmer welfare schemes. 

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