Sugarcane crushing licence withheld for 64 sugar mills in Maharashtra over farmer dues

The crushing licences of 64 sugar mills in Maharashtra have been withheld for the sugar season of 2021-22, as they are yet to pay the full amount of the fair and remunerative price (FRP) to farmers for the last crushing season, senior officials of the Maharashtra Sugar Commissionerate said to Financial Express. These mills owe farmers around Rs 600 crore in cane dues, sugar commissioner Shekhar Gaikwad said.

So far the Commissionerate has approved of crushing licences for 145 sugar mills and some 46 factories have begun crushing.

Gaikwad said the clear picture about FRP payments for the new season will emerge only at the end of November when most mills will begin crushing operations for the new season. Earlier, the Commissionerate had colour-coded sugar mills based on their payment history. The step was taken to provide a ready guide for sugarcane farmers to decide where to sell their sugarcane.

Meanwhile, the Maharashtra State Electricity Distribution Company (MSEDCL) has instructed the Sugar Commisionerate to ask the mills to deduct the power supply dues from the sugar cane payment to be made to the farmers. The farmers from the sugarcane belt have pending bills worth hundreds of crores for the power consumed for irrigation from the past two years.

The Sugar Commissioner pointed out that there was no provision for the sugar commissionerate or the sugar factories to recover power bills on behalf of the state electricity board. The mill owners have asked the MSEDCL officials to provide a written consent from farmers to deduct the amount from the cane payments.

The cumulative dues of the entire state amount to nearly Rs 40,000 crore from the agriculture sector. Significantly, the state government has guaranteed loans worth Rs 28 crore to two sugar factories. Last year, the government had extended guarantees for loans worth Rs 516 crore to 32 sugar factories. This season, sugarcane farmers in Maharashtra have cultivated cane on 12.32 lakh hectares as compared to 11.42 lakh hectares last year. Sugar production is estimated to touch around 112 lakh tonnes of sugar. So far, factories have crushed around 18.35 lakh tonnes of sugar to produce around 13.31 lakh quintals of sugar.

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