Maha CM Devendra Fadnavis directs sugar mills to pay 80% of FRP to farmers

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Pune | Published: December 12, 2015 1:01:55 AM

According to industry experts, the first installment of the Rs 1,100-crore loan given under SEFASU comes up in March.

Maharashtra chief minister Devendra Fadnavis on Friday directed sugar mills in the state to pay 80% of the fair and remunerative price (FRP) to farmers on the completion of the first 14 days of crushing operations. Millers have been given time to make the remaining 20%. The chief minister made this announcement of the 80:20 formula after chairing a meet of all the stakeholders at the ongoing winter session of the state legislature in Nagpur. Millers however say it will be difficult for them to make 80% of the payment in a such a short time and suggested that they will be able to pay FRP according to the pledge amounts released by banks.

The Maharashtra cane season of 2015-16 has begun with pending FRP dues of R670 crore, and while farmer organisations in the state have been pretty aggressive demanding FRP for the current season in a single amount, millers have been maintaining that it will be difficult for them to pay 100% FRP after the first fortnight of crushing.

As on November 30, 2015, the arrears have touched R1,251 crore for the ongoing season. The meet was held in Nagpur following the threat of an agitation by farmer organisation Swabhimani Shetkari Sanghatana (SSS) on December 13 in Kolhapur. Chandrakant Patil, Maharashtra cooperation minister, said it is now binding on the mills to pay 80% of the FRP amount to farmers after a fortnight of crushing operations. Farmer leader Raju Shetty agreed to call off the agitation after we arrived at this 80:20 formula, Patil told FE. The meet was attended by chairmen of sugar mills including political leaders Ajit Pawar, Jayant Patil, Harshavardhan Patil, Radhakrishna Vikhe Patil and members of the Cane Control Board, among others. Shivajirao Nagawade, chairman, Maharashtra State Cooperative Sugar Factories Federation, termed this as a one-sided decision and although the mills will make all efforts, it will be difficult for them to pay up under the formula decided by the state. “There is no doubt that millers are ready to make FRP payments to farmers. The question that remains is, how will it be possible for them to make these payments when they are reeling under a financial crisis. Millers have been saying that they are ready to make payments as per the pledge amounts released by banks,” Nagawade said.

Patil said that of the R20,000-crore FRP payments for the season of 2014-15, mills have paid up R19,400 crore till date leaving dues of around R600 crore. Around 93 mills have made 100% FRP payments and 81 mills have not paid the total amount and have dues of around R1 crore or so. Notices will be issued to those mills soon, he said. MLA Jayprakash Dandegaonkar, vice-chairman of the federation, said that mills will make all efforts to make 80% payment and expressed doubts if this would be possible.

According to industry experts, the first installment of the R1,100-crore loan given under SEFASU comes up in March. The first installment is to the tune of R694 crore and next year, April onwards, mills also have to pay the first installment of the soft loan which comes up to R400 crore.

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