Maha govt clears 22 sugar mills for Centre’s soft loan scheme

By: | Published: August 27, 2015 12:10 AM

As many as 22 sugar mills in Maharashtra have been cleared by the state Cabinet for the soft loan scheme announced by the Centre.

As many as 22 sugar mills in Maharashtra have been cleared by the state Cabinet for the soft loan scheme announced by the Centre.

These 22 factories would be receiving interest-free loans under the Centre’s scheme, making them eligible to crush in the new season. The state government would pay Rs 56.33 crore towards the interest for the next five years.

Of the Centre’s R6,000 crore interest-free loan, Maharashtra’s share is around Rs 1,850 crore.

Meanwhile, primary estimates by the State Agriculture Department reveal that around 68,000 hectares have been reduced from the usual acreage of 10.34 lakh hectares in the state. Around 800 lakh tonne of cane is expected to be crushed next season with production estimated at 90 lakh tonne. This season Maharashtra produced a record 104.5 lakh tonne.

The state Cabinet has also decided to extend the scheme to those sugar factories which had paid more than 50% of the fair and remunerative price (FRP) to sugarcane growers in the last season. The money coming from the scheme would be going towards making FRP payments to farmers.

Millers in Maharashtra have been reluctant to availing of the soft loan scheme. Top officials of the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) pointed out that the general view among millers is that this is a loan that has to be paid.

Moreover, there are stringent conditions of personal guarantees attached which seem to have led to some unease among the millers, said Sanjeev Babar, MD, MSCSFF. Purchasing raw material through loans does not make business sense either, he said.

Although prices have improved to about R2,200 per quintal, around 60% of the sugar has already been sold.

Around 147 mills in the state have made more than 50% cane payments to farmers and are therefore considered eligible for the loan. The mills are expected to submit details of last year’s production figures and the proof of payments of at least 50% dues of the FRP payments to farmers for this season in order to be eligible for the bank loan.

A total of 178 factories had crushed 929.5 lakh metric tonne of cane and the sugar production had touched 104.79 lakh metric tonne.

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