Even as the cane crushing season is about to end in Maharashtra in 10 days, the issue of fair and remunerative price (FRP) payment to farmers is yet to be resolved. The Maharashtra State Sugar Commissionerate has decided to summon sugar mills with a 30% gap in FRP payments and seek reply on why payments are not being made.
State sugar commissioner Vipin Sharma told FE that 36 mills have been issued notices and a fresh round of hearings will begin from May 20 at Pune. The commisisonerate has so far held three rounds of hearings. This time, the commissionerate has decided to summon mills with more than 30% gap in making FRP payments.
Cane arrears to farmers in Maharashtra are now estimated at around R4,200 crore-R4,300 crore.
Earlier 26 mills were issued notices and were told to cough up funds to pay up farmers. The government had also announced a R2,000 crore interest-free loan as a temporary relief measure for mills. However, the funds are yet to be released by the government.
Till date, around 926 lakh tonne of cane has been crushed in the state producing 104 lakh tonne of sugar. Around 164 mills have shut down operations and another 14 mills continue to crush cane, Sharma said. These operations should last for the next 10 days and the final figures are estimated to touch 930 lakh tonne to be crushed to produce some 105 lakh tonne of sugar, a record figure for Maharashtra.
Earlier, around 26 mills with a shortfall in payments of more than R400 per tonne for cane crushed until February 15 were called for hearings at the commissionerate. However, a fortnight ago, the commissionerate had put the hearings on hold after the announcement of the R2,000-crore loan by the government. Mills had then expressed their inability to cough up funds.Only 5 of the 170-odd sugar mills in Maharashtra have been able to pay FRP to farmers this season. Almost all mills have been waiting for the release of the loan package. The GR regarding the package is yet to be issued and the file is currently pending with the finance ministry.
As per data released by Isma, Maharashtra mills have produced 104.37 lakh tonne of sugar till May 15, 2015, as against 77.20 lakh tonne produced during the corresponding period in 2013-14. As of May 15, 2015, 11 mills are operational as compared to only two in 2013-14. Isma officials say there is need to adopt rationalised cane pricing policy across the country and check the huge mismatch between cane price and sugar price which is currently distorting the economics of sugarcane and sugar production.
The reason for surplus sugar output is that the mills are under legal compulsion to crush all the surplus sugarcane.
Therefore, either the government pays the cane price arrears to the farmers directly or assists the industry by buying out 30 lakh tonne of sugar at the FRP as well as ensuring that the ex-mill sugar price at least cover the costs of producing sugar, the statement released by Isma says, adding that time is running out and the government needs to intervene quickly.