Maharashtra cooperation minister Harshvardhan Patil said that the government is working out a financial package to bail out sugar mills in the state. “Discussions are on and the chief minister had held a meeting to work out financial assistance for the mills. We understand that the government has to provide support to both sugar mills and farmers. The sugar mills are in bad shape since they are unable to make cane payments to farmers and are unable to sell sugar at a lower price. The farmers are also demanding a higher cane price,” he told FE.

“The deficit per quintal while crushing works out to R500-R700, which is very high and the total loss for the industry amounts to R4,000-5,000 crore,” he explained.

Patil said the chief minister had approached the Centre with demands for an interest subvention package, creation of buffer stock, increasing import duty to 30% on raw sugar, and increasing blending of ethanol to 10%. Since the gap in production cost per quintal is increasing to R500-700 per quintal, both the state and the Centre have to work out assistance soon. At the state level, issues related to purchase tax, ban on interstate movement of molasses and export subsidy are being worked on, he added.

Meanwhile, farmer bodies from Maharashtra, Karnataka, UP, Tamil Nadu, Punjab and Bihar have planned to stage a sit-in at Jantar Mantar in Delhi on December 12 to demand for an increase import duty to 50% and increasing ethanol blending to 20%.

Kurguru Shantakumar, president, All India Cane Growers Association, said since several mills in all these states were unable to begin crushing operations as they first had to pay arrears to farmers. The total arrears work out to about R12,000 crore, he said. The farmers are demanding a cane price of R3,500 per tonne, he said.