Sugar News Details

15% interest order to sugar mills for cane tillers' dues


By: Satyajit Joshi
State sugar commissioner Shekhar Gaikwad on Tuesday issued a circular, directing sugar factories to pay 15% interest on the pending bills of the cane farmers.
This comes two days before the meeting between chief minister Devendra Fadnavis and representatives of sugar factories on the delayed fair and renumerative price (FRP) payment to the farmers.
Sugar factory representatives are now expected to meet on Friday to take stock of the situation and decide how to run the mills in the current situation.
In the circular on Tuesday, Gaikwad said both the private and cooperative sugar factories would have to pay 15% interest on the non-payment or delayed bills of the cane farmers. The circular was issued after a delegation of Swabhimani Shetkari Sanghatana met him on the issue.
Gaikwad had said last week that he would remind the sugar mills of their “legal commitment” to pay arrears to the farmers.
Sources in the sugar commissionerate said it was not for the first time that an order of levying interest was issued. The circular states that the factories must pay FRP-based price to the farmers within 14 days of the cane being collected for crushing.
Sugar factories in Maharashtra currently owe Rs 4,576 crore to the farmers this crushing season. This amount is payable from 172 private and cooperative sugar mills. In Kolhapur and Sangli disricts, all 37 sugar factories have already been told to pay the arrears with interest.
Representatives of the factories in the two districts will meet on Friday to take stock of the situation. Sources said they would consider all options, including continuation of the current crushing season.
The sugar mill operators feel that government was not positive towards their demand and it would be difficult for them to run the factories in the present scenario. “It will be adding financial burden everyday if crushing is continued”, a cooperative mill director said.
A delegation of factories met Fadnavis in Mumbai on Tuesday and reiterated the demand for Rs500 crore financial assistance to bridge the gap between retail prices of the sugar and its manufacturing cost. They said the retail price of sugar in the market was Rs29 per kg as against the manufacturing cost of Rs 34 per kg.