Streamline payments to farmers: Maharashtra millers seek Centre help to revise sugar MSP

By: | Published: November 21, 2018 3:58 AM

The Maharashtra State Cooperative Sugar Factories Federation ( MSCSSF) has approached Prime Minister Narendra Modi and Union food and consumer affairs minister Ram Vilas Paswan for revision of the minimum support price (MSP) of sugar from Rs 2,900 per quintal to Rs 3,400.

sugar cane dues, uttar pradesh govt, food ministry, sugar ex factory rateAs the MSP of sugar is currently fixed at Rs 2,900 per quintal, it becomes evident that the industry is operating at a net loss which shall lead to pendancy of FRP payments to farmers as was experienced in 2017-18, Dandegaonkar said.

The Maharashtra State Cooperative Sugar Factories Federation ( MSCSSF) has approached Prime Minister Narendra Modi and Union food and consumer affairs minister Ram Vilas Paswan for revision of the minimum support price (MSP) of sugar from Rs 2,900 per quintal to Rs 3,400.

In a representation to the Prime Minister, Jayprakash Dandegaonkar, chairman, Maharashtra State Cooperative Sugar Factories Federation (MSCSSF) stated the MSP of Rs 2,900 per quintal was fixed in 2017-18 based on the fair and remunerative price (FRP) of Rs 255 per quintal (for 9.5% recovery) and Cane Conversion Cost.

However, the FRP has since been revised to Rs  261.25 per quintal at 9.5% recovery and Rs 275 per quintal at 10% recovery for the sugar season of 2018-19. This calls for a revision in MSP to streamline smooth FRP payments to farmers, he said.

The calculation of MSP also needs to factor in the financial cost and overheads largely arising out of loans. These loans had been taken for the payment of FRP within 14 days of the supply of cane, working capital to transfer payments to harvesting and transportation (H&T) workers on behalf of farmers, purchase of consumables and packing material, he pointed out.

As the MSP of sugar is currently fixed at Rs 2,900 per quintal, it becomes evident that the industry is operating at a net loss which shall lead to pendancy of FRP payments to farmers as was experienced in 2017-18, Dandegaonkar said. This had led to government intervention through financial packages for enabling the industry to meet FRP obligations, he said.

Since the new sugar season 2018-19 has commenced, a timely decision for revision in the MSP shall ensure timely payments to farmers and avoid the necessity of government intervention for financial aid, the federation members stated. Dandegaonkar urged the ministry of food & consumer affairs to revise MSP to Rs 3400 per quintal so as to break even the cost of production.

Millers in Maharashtra still owe farmers Rs 81 crore in FRP payments for the last season of 2017-18. According to senior officials in the Maharashtra Sugar Commissionerate, some 27 revenue recovery certificate (RRC) orders had been issued by authorities of which 10 RRCs are still pending.

On October 30, nearly 20 sugar factories in the state were still owing Rs 125 crore as FRP dues to farmers and their crushing licences for the season of 2018-19 had been withheld by the State Sugar Commissionerate. Maharashtra’s sugar season commenced on October 20 and nearly 55 factories have been given licences. Around 194 factories have applied for crushing licences.

Farmer representatives of the Cane Control Board have urged the sugar commissioner not to grant crushing licences to these factories for the new season. As on November 15, 108 mills were in operation to produce 6.31 lakh ton of sugar. Last year, sugar mills started crushing late and had produced some 3.26 lakh tons of sugar in the same period.

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