Indian sugar mills association

Arrears: Mills get nod to give farmers sugar as part-payment

Date:	15 Jan 2019

Source:	The Economic Times

Reporter:	ET Bureau

News ID:	35899

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Pune: Maharashtra’s sugar commissioner has given an in-principle approval for making part of the cane payment in the form of sugar as sugarcane price arrears in the state have increased to Rs 4,576 crore. If implemented, this move could create a big decentralised stock holding with farmers, which can break the monopoly of traders in the sugar trade.

“Apart from subdued sugar prices, sugar millsNSE 0.62 % have been complaining about lack of demand for sugar. Some sugar mills, which have been facing liquidity crunch, have agreed to pay farmers in kind,” said Shekhar Gaikwad, commissioner (sugar), Maharashtra.

Of the 181 sugar millsNSE 3.26 % that have been in operation in the state this year, only 10 have paid full amount of the fair and remunerative price (FRP) as mandated by the law, while 25 have paid more than 80 per cent of the FRP amount. So far, sugar mills have paid only 39 per cent of the FRP dues to the farmers. The state has crushed 497 lakh tonnes of sugarcane and produced 52 lakh tonnes of sugar till date with a sugar recovery of 10.63 per cent.

The Swabhimani Shetkari Sanghatana, a farmers’ organisation based in south Maharashtra’s sugarcane belt, has been firm on taking full payment of FRP as the first installment of cane price. It has also resorted to some violence to press for its demand.

Raju Shetty, member of Parliament and founder leader of the Sanghatana, said, “Per-acre sugarcane production of farmers has declined by 10 tonnes to 15 tonnes due to drought. As sugar mills haven’t made cane payments or made only part payment of the FRP, farmers are not able to repay their crop loans. Defaulting on the loans makes them ineligible to get the interest rate subventions, leading to increase in burden of interest payment on them.”

Shetty, who has demanded that sugar mills should give sugar to the farmers if they cannot pay him/her in cash, said, “As 80 per cent of the farmers produce about 50 tonnes to 60 tonnes of cane, each farmers will get about 8 kg to 19 kg sugar per tonne of cane delivered to the factory.”

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