FRP payments have become a contentious issue in Maharashtra with sugar prices falling in the recent past, and even as prices have jumped, millers still maintain it is difficult to make payments
With fair and remunerative price (FRP) arrears for the sugar season of 2017-18 piling up to Rs 2,228 crore, the sugar commissionerate has issued showcause notices to 136 factories in Maharashtra for not completing their FRP commitments to farmers. FRP payments have become a contentious issue in Maharashtra with sugar prices falling in the recent past, and even as prices have jumped, millers still maintain it is difficult to make payments. Maharashtra sugar commissioner Sambhaji Patil said action will have to be taken if millers do not pay up. Several mills have made part payments citing low sugar prices and around 84% of the payments have been made so far, he said. According to the commissioner, the total FRP payments come up to Rs 12,813 crore, of which payments of Rs 10,775 crore have been made so far, which leaves some Rs 2,228 crore in pending payments. As per procedure, action will continue, he said, adding that hearings are in progress.
Several mills cut down the first installment payment announced at the start of the season in view of the low sugar prices. Farmer organisations such as Swabhimani Shetkari Sanghatana (SSS) did not take to this kindly and held agitations in Solapur and Kolhapur last week. SSS chief Raju Shetti made it clear that millers should be prepared to pay farmers as per the agreed formula and not make sliding sugar prices an excuse for not making payments. “Sugar prices are being manipulated by a few elements in the sector so that millers do not have to share revenue as per the Rangarajan committee recommendations,” Shetti said.
He alleged that several private mills were also into trading and were making purchases by their own trading companies to later sell these at higher rates, and called for a detailed investigation in the sale of sugar in the last couple of months on the grounds that there is no perceptible change in retail prices of sugar. He said that the sanghatana will meet the income tax authorities and intensify agitation against the millers and the government. Maharashtra State Cooperative Bank has increased valuation of sugar by Rs 130 per quintal to Rs 3,100 per quintal. Sugar prices had jumped by 10-12% following twin government decisions of increasing import duty and capping mill level sugar sales two weeks ago, but they have stagnated or declined slightly in different producing markets of the country in the last few days.
The capping in mill level sugar sales, which mandates sale of only 17 and 14 % of stock with mills for the months of February and March, has led to hike in sugar prices but industry sources say this is a temporary measure and once the restrictions are removed, prices could come down. Of the 136 mills that are yet to complete FRP payments, 98 mills are cooperatives and 86 are from the private sector. Around 47 factories have made higher payments than FRP. Around 111 factories have made payments ranging between 51% and 98%. Over 21 factories have made payments of barely 12-50%.