Sugarcane arrears in Maharashtra have now mounted to Rs 5,000 crore and industry sources claim the position is likely to worsen.
The offer of sugar by cash-strapped millers in Maharashtra in lieu of Fair and Remunerative Price (FRP) payments to farmers seems to have drawn a cold response from farmers.
Instead, they are preferring to wait it out rather than be saddled with sacks of sugar, industry sources said. None of the millers have received applications from farmers for sugar instead of cane payments, they added. Sugar commissioner Shekhar Gaikwad had earlier given an in-principle approval for making cane payment in the form of sugar after the sugarcane price arrears had shot up to Rs 4,576 crore in the middle of January. He later admitted that there were technical difficulties in implementing this decision.
Gaikwad had issued orders on January 29 for the attachment of properties of 39 mills across the state for non-payment of FRP to farmers. The threat of legal action sent the millers in a huddle who decided to come up with this solution. While February 13 is the last date given by millers to farmers to come forward and fill applications showing readiness to accept sugar instead of cash payments, farmers have chosen not to opt for the scheme. Sugar mills in Sangli and Kolhapur had issued public notices declaring their intentions to give sugar to farmers instead of cash for cane.
Industry sources, however, pointed out that technically since the sugar is already pledged to banks by millers, they have no right to offer sugar to farmers. Farmer organisation Swabhimani Shetkari Sanghatana spokesperson Yogesh Pande said that millers cannot offer sugar to farmers instead of FRP payments. If this works then farmers can also turn around and say they will offer sugar to bankers instead of cash payments.
Moreover, since the sugar is already pledged to banks there is no provision in the Cane Control Act for payment in kind instead of cash payments, he said. Cane arrears in the state have now mounted to Rs 5,000 crore and industry sources claim that the arrear position is likely to worsen. Moreover, millers are also playing the wait and watch game since there is market speculation about a possible price hike by the Centre in the next few days.
Maharashtra State Cooperative Sugar Factories Federation chairman Jayprakash Dandegaonkar said that farmers are willing to take delayed payments and several factories have signed contracts with farmers prior to the beginning of the season to accept default in payments or payments in installments. There is a provision in the Cane Control Act 1966 whereby millers and farmers can enter into contracts with regard to FRP payments,” he said. When contacted, Sugar Commissioner Gaikwad said that the response to the sugar scheme was expected to be lukewarm. This was just a way out to relieve the financial stress on mills and a possible way out, he said.