Maharashtra govt gives ‘crushing’ blow to sugar factories

By: | Published: October 14, 2015 12:10 AM

Mills making less than 75% of FRP payments not to get licences

The start of this year’s sugar season in Maharashtra seems to be in a state of flux. The Maharashtra government has decided not to provide licences to operate this year’s cane crushing (starting October 15) to the factories those have made less than 75% fair and remunerative price (FRP) payments to cane farmers.

Earlier, the government had declared that mills will be allowed to crush in the sugar season of 2015-16 subject to the condition that those mills, which are yet to make FRP arrears to cane farmers, will  have to give an undertaking on a Rs 200 stamp paper that they will clear the dues within a month.

Moreover, sugar factories have made it clear that they may not be in a position to make one single FRP payment, but cane workers are also up in arms saying that they will not allow mills to begin crushing unless their wages are revised.

Senior officials at the Sugar Commissionerate in the state has received around  164 applications from mills in the state. These include 101 cooperative mills and 63 private mills. In addition, Western India Sugar Mills Association ( WISMA) has indicted that some of the mills may begin crushing late by November 1.

According to some WISMA officials, it will be difficult for mills to make FRP payments for the new season in one single amount since prices have been low. Sugar prices in Maharashtra are currently in the range of Rs 2,650 to R 2,700 per quintal. The demand is expected to rise on the eve of the festival season.

Spokesperson of the Swabhimani Shetkari Sanghatana Yogesh Pande, said: “The recent spurt in sugar prices have led to comfort for sugar millers to clear outstanding cane payment dues. Maharashtra mills sold 1.8 million tonne sugar in August and September at higher prices which led to additional gain of R640 crore. Further Rs 1,052 crore have been disbursed to millers for FRP payments under loan incentive scheme of the Center.”

Further, some factories are expecting to receive R1,000 crore soon. Total FRP outstanding was Rs 2,600 crore. A rise in sugar prices will lead to increased availability of funds from lender banks. Around  34 lakh tonne of sugar stock with increase in sugar prices by Rs 400 per quintal should make additional Rs 1,360 crore available to millers, he added.

According to the Sugar Commissioner, Rs 1,300 crore has been disbursed through the Centre’s scheme of Rs 6,000 crore soft loan.  In Maharashtra, around 70 proposals have been scrutinised. The Centre had recently extended the last date for filing applications for the soft loan to October 16.

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