Fair price: Maharashtra sugar millers, farmer outfits at loggerheads over payment

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Pune | Updated: December 26, 2018 7:39:40 AM

Another confrontation seems to be brewing between the sugar millers in Maharashtra and farmer organisations. A group of Kolhapur millers has expressed its inability to give the fair and remunerative price (FRP) in a single payment to farmers.

sugar export, sugar export contract, sugar price difference, sugar price per quintalThe millers therefore have decided to approach the CM once again with all the issues.

Another confrontation seems to be brewing between the sugar millers in Maharashtra and farmer organisations. A group of Kolhapur millers has expressed its inability to give the fair and remunerative price (FRP) in a single payment to farmers. Farmer outfit Swabhimani Shetkari Sanghatana, on the other hand, has given the millers time till December 31 and has threatened to launch an agitation from January 1. Raju Shetti, who leads the Swabhimani Shetkari Sanghatana, said the farmer body is giving an eight-day deadline to sugar mills to pay the FRP to farmers. “If the mills fail to respond, we are going to launch an agitation from January 1,” he said. Shetti stated that the Sanghatana would not allow split payment of FRP to farmers.

The millers have decided to approach chief minister Devendra Fadnavis once again with a plea to urge the Centre to intervene and increase the minimum floor price of sugar from the existing Rs 2,900 per quintal to Rs 3,400 per quintal to overcome the current financial distress. Millers have been issued notices over the non-payment of cane dues and farmer outfits are now up in arms threatening an agitation unless the millers pay up. Millers have sought a a grant of Rs 500 per tonne to be deposited into farmers’ accounts. Prakash Awade, chairman, Jawahar Cooperative Sugar Factory, pointed out that since millers were finding it difficult to make the total amount, some of them had made part payment to farmers and this was also accepted by farmers who have understood the gravity of the situation.

The millers had held a meeting in Kolhapur last week to discuss FRP payments to farmers. Even after a month and half since the crushing began, millers have been unable to make FRP payments to farmers. Around 15 mills in this region have been issued notices by the deputy district registrar for non-payment of cane dues to farmers for the season of 2018-19. Millers in Maharashtra have managed to pay Rs 360 crore in FRP dues to farmers against total payable FRP of Rs 2497. 41 crore.

According to Awade, millers will remain in financial distress unless the minimum floor price is increased to Rs 3,400 per quintal. “Sugar prices have fallen and are hovering in the range of fixed price of Rs 2,900 per quintal. Moreover there is little demand for sugar and it is binding on millers to make payments to farmers. Banks have fixed hte pledge rate at Rs 2,900 per quintal which also includes a processing cost of Rs 250 per quintal, the previous year’s loan, excise duty, and Rs 500 towards the soft loan installment which leaves Rs 1,800 per quintal causing short margins, he explained. Banks are unwilling to release sugar because of the issue of short margins. Millers are finding it difficult to make the short margin payments to the banks and therefore no export is happening. “The entire sector is caught in a bind,” he said.

The millers therefore have decided to approach the CM once again with all the issues. “We had discussions with state revenue minister Chandrakant Patil and he has assured us a meeting with the CM. The CM will then take up these issues at the Centre,” he said.

Former Union agriculture minister Sharad Pawar had earlier sought Rs 500 crore financial package from the state government to enable sugar factories to make FRP payments to sugarcane farmers. Pawar had stated that the state had a bumper production of sugar, prompting a price drop. It would be difficult for sugar factories to make payment to farmers if this situation continued. The state government should come to the aid of the sugar sector. In response, CM Fadnavis said that he had already requested the central government to increase the ex-mill minimum support price (MSP) of sugar to Rs 31 per kg from Rs 29 per kg.

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