Maharashtra sugar millers still owe Rs 397 crore in FRP dues

The new crushing season of 2019-20 is a month away and 56 sugar factories in Maharashtra still owe farmers Rs 397.96 crore in cane payment dues for the season that ended a few months ago, according to latest data released by the Maharashtra Sugar Commissionerate.

During the season, around 195 factories crushed some 952.11 lakh tonne of cane to produce 107 lakh tonne of sugar.

The total payable FRP (Fair Remunerative Price) was Rs 23,293.82 crore of which factories have paid Rs 22,915.62 (98.38 per cent). Around 56 factories have FRP dues and 139 factories have made 100 per cent FRP payments, 45 factories made 80-99 per cent dues, 8 factories made 60-79 per cent payments and 3 factories made payments below 59 per cent.

During the season 82 Revenue Recovery Code (RRC) orders were issued to 63 factories. This season, the Commissionerate has been pretty aggressive on the recovery of cane payments from factories making matter tougher for sugar millers in the state.

Recently, Maharashtra’s sugar commissioner Shekhar Gaikwad ordered 20 sugar mills in Marathwada to pay 15 per cent interest to cane growers for their failure to clear payments on time for the 2014-15 season. Significantly, sugar mills in Maharashtra will now get their crushing licences for the new season subject to the condition that they agree to pay up FRP dues of farmers within a span of 14 days as per the Sugarcane Control Order, 1966.

Starting this crushing season, sugar millers in Maharashtra will not be able to continue with a common agreement accounting for a possible delay in the FRP payment to farmers. During the 2018-19 season, with a record sugar production of 107 lakh tonne, millers in the state found it difficult to make FRP payments to farmers, resulting in agitations by farmer bodies. The low sugar prices this season had thrown the payment model between farmers and mills out of balance.

There has been excess production of sugar for two years in a row. Maharashtra had produced 107 lakh tonne of sugar last season, the highest-ever recorded in the state.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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