Maharashtra farmer leaders call for scrapping FRP, aerial distance norm between factories

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Published: November 21, 2019 12:21:25 AM

CACP chairman Vijay Pal Sharma said that FRP is calculated on the basis of cost of production and several other factors. Admitting that FRP was not increased last year, he said it was hiked by 12% the year before.

Some of the other demands of farmers include a payment of Rs 4,000 per tonne to cane farmers by sugar millers, MSP for sugar of Rs 3,500 per quintal, different rates for sugar for household use and commercial use and higher transportation cost for cane.Some of the other demands of farmers include a payment of Rs 4,000 per tonne to cane farmers by sugar millers, MSP for sugar of Rs 3,500 per quintal, different rates for sugar for household use and commercial use and higher transportation cost for cane.

As Maharashtra’s sugar season of 2019-20 is set to commence on November 22, farmer groups have called for scrapping of Fair and Remunerative Price (FRP) mechanism for cane and encouragement of competition between sugar mills by removal of a provision that stipulates a minimum radial distance of 25 km between two factories.

Farmer leaders who attended a meeting in Pune called by the Commission for Agricultural Costs and Prices (CACP), the body which recommends minimum support prices (MSP), pointed out that the radial distance provision prevents a new mill from coming up within the radius of 25 km of an existing (or even another new) factory, thus, making it difficult for farmers to get good prices for their produce due to lack of competition between mills.

The CACP had called the meeting for finalising the Fair and Remunerative Price (FRP) for cane for the 2020-21 season but was met with stiff resistance from farmer leaders who called for scrapping of FRP system and adoption of a higher paying mechanism followed in other states.

Shetkari Sanghatana president Raghunathdada Patil said that the condition of the radial distance was introduced to protect the interests of factories and although several attempts have been made by farmer leaders to scrap the provision not much has come out of it. Farmer leaders Raju Shetti and Anil Ghanwat were also present at the meeting.

Some of the other demands of farmers include a payment of Rs 4,000 per tonne to cane farmers by sugar millers, MSP for sugar of Rs 3,500 per quintal, different rates for sugar for household use and commercial use and higher transportation cost for cane.

The FRP, which is determined under Sugarcane (Control) Order, 1966, is the minimum price that sugar mills have to pay to cane farmers. Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own cane price called State Advisory Prices (SAPs), which are usually higher than the Centre’s FRP. Maharashtra follows the practice of giving FRP.

Patil pointed out that farmers in Uttar Pradesh were getting an SAP of Rs 3,250 per tonne while the FRP in Maharashtra was lower by Rs 500 per tonne. Even Gujarat millers pay farmers Rs 4,741 per tonne, around Rs 2,000 per tonne more than Maharashtra.

Shetti, who represented Swabimani Shetkari Sanghatana, said the method for calculating FRP is incorrect. Prices of fertilisers, electricity and labour have gone up but FRP has remained the same. Even sugar prices have gone up by Rs 200 per quintal but cane prices have not gone up, he pointed out.

CACP chairman Vijay Pal Sharma said that FRP is calculated on the basis of cost of production and several other factors. Admitting that FRP was not increased last year, he said it was hiked by 12% the year before.

Industry representatives said that they produce three to four grades of sugar and there is a difference of Rs 400 in these grades but this factor is not taken into account when the MSP for sugar is finalised, they said.

The government is yet to release the subsidy money for sugar export, they said, adding that the interest on pledge loans is going up, increasing the financial burden on sugar mills.

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