Sugar News Details

As FRP due rise, Maharashtra sugar millers seek CM intervention to prevent punitive action


The Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) has approached chief minister Devendra Fadnavis, seeking his intervention to prevent punitive action against sugar factories that have defaulted on Fair and Remunerative Price (FRP) payments to farmers.
In a representation submitted to the CM, Jayprakash Dandegaonkar, chairman of the federation, reiterated the financial distress of the sugar sector of the state and pointed out that the members of the federation have had several meetings with the CM for payment of FRP in installments and had accordingly received assurances from the government that no action would be taken against mills.
The Maharashtra Sugar Commissionerate has served notices under the Revenue Recovery Certificate (RRC) to 39 sugar mills in the state to confiscate their sugar stocks because of making less than 25% of the FRP payment to farmers.
Showcause notices have been issued to remaining 135 mills and they will be called for hearings on February 1 and 2 after which RRCs will be issued to these millers as well. The Commissionerate has also warned millers that FIRs would be registered against the millers if the payments are not cleared within 7 days. This move follows a written assurance given by the Commissioner to the Swabhimani Shetkari Sanghatana (SSS) that had staged a sit-in protest outside the office of the Commisionerate on January 28.
Dandegaonkar said that despite the Minimum Floor Price of Rs 2,900 per quintal fixed by the government, the demand has been subdued in the market which has led to a stockpile of sugar in the state.
Notwithstanding the lack of demand, sugar millers can’t sell below Rs 2,900 per quintal in the market, he said. Competition from Uttar Pradesh (UP) has led to a lot of pressure on mills in the state and markets that were traditionally served out of Maharashtra are now being served by UP, he said.
Sugar millers are unable to fulfil their export quotas and have called for removal of hurdles so that factories can export sugar. MSC Bank has recently agreed to extend a short-term loan to millers to help them bridge the gap arising out of the valuations made by the bank and prevailing market prices.
Until now, the bank was not willing to release sugar pledged with the bank unless the millers had paid up the difference or short margins arising because of the difference in rates.
The move of MSC Bank will directly help 51 sugar mills. Another 51 mills that have borrowed from district cooperative banks will also be eligible for similar loans from MSC Bank to export sugar. If other banks follow suit, several other millers can also export and fulfil the quota given by the Centre, Dandegaonkar said.
Moreover, sugar millers are yet to receive the promised payments of the subsidy declared by the Centre for the season of 2017-18 for export. The central government had promised subsidy of Rs 55 per tonne for the growers, which has been increased to Rs 138 per tonne in the current year. However, last year’s dues of Rs 1.42 crore are yet to be paid by the central government.
Dandegaonkar also said that millers are yet to receive the interest component of the soft loan promised by the Centre and the state government. The federation has approached the government for financial assistance. The governments of UP, Punjab, Haryana, and Bihar have declared huge packages for the sugar sector, he said.
The federation has urged the CM to issue directives to the Sugar Commissioner to take back the letter issued on behalf of the commissionerate. As per the Sugar Cane Control Order 1966, there are provisions to make FRP payments in installments and accordingly other states are making payments in 3-4 stages.
None of the states have taken the extreme step of threatening to register FIRs against mills, Dandegaonkar said.
He, therefore, urged the Commissionerate to refrain from taking any such action against sugar factories.
Significantly, around 20 ofthe factories that have been served RRCs are located in the ‘sugar belt’ districts of Sangli, Kolhapur, Satara and Solapur, while the rest are in Marathwada. The respective district collectors can now authorise seizure of sugar stock in the godowns of these defaulting factories, preventing them from selling it.