15 sugar mills in Maharashtra likely to face recovery action

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Updated: February 14, 2019 2:32:19 AM

Retail sales by mills also did not take off as expected and several mills did not show interest in establishing retail outlets outside factory gates pointing out that this would mean added expense on their balance sheets.

The Commissioner pointed out that roughly more than Rs 4,000 crore have come in the form of FRP payments.

Maharashtra Sugar Commissioner Shekhar Gaikwad on Wednesday announced that the commissionerate has begun the process of issuing Revenue Recovery Certificates (RRCs) against 15 sugar mills and the notices will be issued in a couple of days to attach their properties.
The decision was announced following an agitation held by the activists of farmer outfit Swabhimani Shetkari Sanghatana (SSS) to seek a review of the action taken against sugar millers who are yet to make Fair and Remunerative Price (FRP) payments to farmers.

The Commissioner told FE that while the recovery position has improved to a great extent in the state, a decision has been taken to issue RRC orders against 3 mills in the four districts of Ahmednagar, Solapur, Pune and Satara that have made lowest FRP payments to farmers. Once RRCs are issued, district collectors can attach the sugar produced and other assets of mills in order to make payment of farmers.

The Commissioner had earlier initiated RRC proceedings against 39 mills following an agitation by the farmer outfit Swabhimani Shetkari Sanghatana (SSS) on January 28 in Pune where nearly 5,000 farmers had resorted to a sit-in protest outside the Commissionerate office to demand pending dues. Maharashtra’s cane arrears that had crossed the Rs 5,300-crore mark by mid January have now come down to Rs 4,841.15 crore by the end of the month.

Gaikwad said that a clearer picture will emerge after February 15 when data will be available on the payments made by sugar factories to farmers. Last week, RRCs were issued to a couple of mills and this week RRCs will be issued to 15 more, he said, adding that the position in Kolhapur where the farmer agitation has been more aggressive is on the verge of being cleared up.

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According to Yogesh Pande, spokesperson of SSS, more than 80% of the payments have come in Kolhapur. Over 18 millers have made full FRP payments in Kolhapur and more millers are expected to pay up in a couple of days, he said. The intent is to maintain the pressure on millers so that farmers receive payments, he added.

Pande, however, warned that the FRP arrear position is likely to worsen as the season progresses.
Industry sources also revealed that millers are now awaiting a possible hike in sugar prices. Currently, the minimum sale price of the sweetener is Rs 29 per kg, Rs 5-6 below the average cost of production. The minimum sale price of sugar may be increased by Rs 1-2 per kg, sources revealed.

Indian Sugar Mills Association has been lobbying with the government to increase the minimum sale price of sugar to Rs 35-36 a kg to ensure mills are able to recover their costs and clear cane arrears. Maharashtra and Uttar Pradesh governments, too, had written to the Centre to increase the sale price, as cane arrears have been accumulating due to a glut in the domestic market.

The Commissioner pointed out that roughly more than Rs 4,000 crore have come in the form of FRP payments.

Meanwhile, the offer of sugar by millers to farmers has not received the expected response. Farmers are preferring to wait it out rather than be saddled with sacks of sugar. Sugar mills in Sangli and Kolhapur had issued public notices declaring their intentions to give sugar to farmers instead of cash for cane.

Retail sales by mills also did not take off as expected and several mills did not show interest in establishing retail outlets outside factory gates pointing out that this would mean added expense on their balance sheets.

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