Maharashtra sugar mills pay 98% of FRP dues to farmers

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Sugar mills in Maharashtra have paid 98% of the fair and remunerative price (FRP) dues to farmers for the crushing season of 2019-20. Mills made FRP payments of Rs 13,425.85 crore to farmers while dues of Rs 209.15 crore are pending this season.

Data released by the Sugar Commissionerate reveals that 144 sugar mills crushed nearly 550.13 tonnes of cane to produce 616.79 lakh quintal of sugar. Mills had to pay Rs 13,635 crore as FRP dues, of which they have cleared 98% by June 30.

Around 118 sugar mills have paid 100% FRP while only 26 still owe dues to farmers. Some 16 mills have cleared 80-99% dues to farmers and 8 factories have made 60-79% FRP payments to farmers while 2 mills have paid less than 60% FRP to farmers.

Compared to 74 factories that were slapped with Revenue Recovery Code (RRC) notices last season, not a single mill has received any notice from the Commissionerate this season. Last year, 195 mills had crushed some 952.11 lakh tonne of cane and had paid Rs 22,137.15 crore in FRP dues to farmers.

The government fixes FRP for every season well in advance, which is a benchmark price below which no sugar mill can purchase cane from farmers. FRP is also linked to a basic recovery rate, with a premium payable to farmers depending on the sugar recoveries from cane.

Sugar recoveries in western Maharashtra mills are usually between 11-13%. Maharashtra’s net cane area has gone up by about 43% in 2020-21, which is mainly due to above-normal monsoon in 2019, followed by normal rainfall from January to March 2020. As against the net cane area of 7.76 lakh hectare in 2019-20, the area is expected to increase to 11.12 lakh hectare in 2020-21, as against the net cane area of 7.76 lakh hectare in 2019-20.

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