Maharashtra sugar mills queue up for interest-free loans

By: | Published: August 4, 2015 12:09 AM

After getting assurance from chief minister Devendra Fadnavis that the state would bear the interest burden for remaining four years, sugar millers in Maharashtra...

After getting assurance from chief minister Devendra Fadnavis that the state would bear the interest burden for remaining four years, sugar millers in Maharashtra have started to apply for the interest-free loan announced by the Centre.

Senior officials from the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) said that now the position has become clear and mills have started applying for loans. According to Sanjeev Babar, MD of the federation, at least 147 mills will be eligible for the loan.

Mills are now making a beeline to the sugar commissionerate to obtain the 50% fair and remunerative price (FRP) dues payment certificates, a pre-condition for loan.

According to the sugar commissioner Vipin Sharma, 96 mills have obtained the certificates from the government. Around 147 mills in the state have made more than 50% cane payments to farmers and are therefore considered eligible for the loan.

Of the Centre’s R6,000 crore interest-free loan, Maharashtra’s share is around R1,850 crore.

Until now, mills were hesitant to apply for the loan since there was no clarity on who would bear the interest burden for the remaining four years. The Centre had promised to pay the interest for one year. However, when private mill owners met Fadnavis and apprised him of the grim situation in the state, the CM assured them that the state would bear the interest burden for the remaining four years.

As the mills line up for certificates from the government, hearings are still in progress at the commissionerate with mills having more than 30% FRP dues being called for explanations. Around R60 crore has been paid by millers so far and we are confident that the arrears position should go below the R3,000-crore mark, he said.

The FRP dues in Maharashtra till date is around R3,111 crore.

Meanwhile, the Deccan Sugar Technologists Association (DSTA) has approached the Centre seeking a solution to the current impasse in the industry. DSTA representatives said the FRP system should continue since it is farmer-friendly. However, the FRP calculations should be reconsidered at the end of the season to determine the revised FRP based on sugar prices of the current season. The sugar prices should be decided as MSP by the Commission for Agricultural Cost and Prices (CACP) for every season, Rajabhau Shirgaonkar, president of the association said.

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