Sugar mills in Maharashtra may now have to pay interest on delayed cane payment from the 2017-18 crushing season.
Sugar mills in Maharashtra may now have to pay interest on delayed cane payment from the 2017-18 crushing season. The sugar commissioner of Maharashtra has sought details for the calculation and payment of interest to cane growers in case the payments are delayed by millers.
As per the Cane Control Order 1966, it is mandatory for sugar millers to pay to farmers within 14 days of cane supply as per the stipulated Fair and Remunerative Price (FRP). The order provides for payment of interest by the millers to farmers at 15% per annum if they do not make cane payment within 15 days of buying the cane. However, this was not implemented by any state.
The country’s largest sugar producer, Uttar Pradesh, implemented this provision in 2016-17. Till September 27, cooperative sugar mills have paid `32.50 crore as interest to farmers, while private sugar mills have paid `309.82 crore as interest on cane arrears.
According to Yogesh Pande, spokesperson of the Swabhimani Shetkari Sanghatana, it took 51 years to get the law implemented. Each year, cane worth `20,000 crore is supplied by the farmers to millers. Often, payments are delayed by one to four months. Now, additional interest burden on millers will amount to over `400 crore if they fail to pay timely. Pande had brought this to the notice of state government and, finally instructions were issued to all joint directors to calculate interest payable to farmers from the current sugar crushing season.
Maharashtra is likely to commence crushing from November 1. In the 2017-18 season, a little over 9 lakh hectares in Maharashtra has come under sugarcane cultivation, according to the estimates of state’s agriculture commissionerate and the Maharashtra State Co-operative Sugar Factories Federation. In the 2016-17 season, sugarcane was grown over a substantially low acreage of around 6.3 lakh hectares, around 37% less than Maharashtra’s average sugarcane cultivation of 10 lakh hectares.