A senior BJP Cabinet minister told The Indian Express that both parties have convinced each other to scale down their demands after much discussion and though the state Cabinet is yet to ratify the decisions, that is only a formality.

While the BJP had insisted on offering cotton farmers Rs 2,500 per quintal against the current Rs 2,100, they have finally settled for Rs 2,300 per quintal. Before the alliance government assumed power in 1995 in the state, cotton was purchased under three slabs depending on the grade of the yield.

The maximum offered then was Rs 1,900 per quintal. The government subsequently abolished one slab and via the federation has been purchasing cotton at Rs 1,900 perquintal and Rs 2,100 per quintal. The federation, which was set up in 1972, has accumulated losses amounting to Rs 1,000 crore.

As for the supply of electricity, no farmers will be supplied power free as promised by Sena chief Bal Thackeray. Instead, small farmers, who comprise 90 per cent of farmers in Maharashtra, will receive electricity at half the current rate. In addition, the government is willing to waive half the Rs 600 crore due from farmers as arrears.

Details of how the state government and the Maharashtra State Electricity Board (MSEB) will share the financial burden arising out of the subsidised power tariffs and the waiver are still being worked out, the minister said.

At present, the MSEB collects its tariffs from low-tension agricultural consumers under three slabs: 1) Installed power of electricity pumps up to 5 horsepower (HP) are charged Rs 500 per HP per annum 2) pumps in the range of 5 and 10 HP, Rs 750 per HP per annum and 3) those which range between 10 and 67 HP are charged atthe rate of 74 paise per unit plus the fuel cost adjustment, which varies between one and five paise per month.