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News
Maharashtra cane farmers get 62% of FRP dues
Date:
05 Feb 2019
Source:
The Hindu Business Line
Reporter:
Radheshyam Jadhav
News ID:
35940
Pdf:
Nlink:
Sugar mills in Maharashtra have paid Fair and Remunerative Price (FRP) dues of ₹3,298 crore to farmers in the last few days following protests by cane growers.
State Sugar Commissioner Shekhar Gaikwad said that of the total FRP dues of ₹5,321 crore, ₹2,023 crore is now pending with sugar mills and the State government will ensure that this amount is paid by mills to farmers before closure of the crushing season.
Following intense agitation by sugarcane growers demanding arrears last week, Gaikwad had announced that stringent action would be taken against defaulting sugar mills. Accordingly, the Commissioner’s Office slapped notices and initiated action against the mills.
The Sugar Commissioner had issued seizure notices to 39 mills while other mill owners were summoned for an explanation. Interestingly, almost all defaulting sugar mills are run by political bigwigs, who are gearing up for Lok Sabha and State Assembly polls. Sugar barons across party lines have now once again decided to knock on the Central government’s doors for assistance.
Nationalist Congress Party (NCP) president Sharad Pawar has already written to the Centre saying that sugar mills will not be able to shoulder the responsibility of paying FRP to farmers without Centre’s assistance considering excess production and the depressed price of sugar in the domestic market.
Benchmark price
In order to protect the interest of farmers and to encourage them to cultivate sugarcane, the government fixes FRP of sugarcane for every sugar season well in advance, which is a benchmark price below which no sugar mill can purchase cane from farmers. Besides, FRP is linked to a basic recovery rate, with a premium payable to farmers for higher recoveries of sugar from sugarcane.
185 sugar mills are crushing cane this season in Maharashtra of which only 11 mills have paid 100 per cent FRP to farmers. The Sugarcane (Control) Order, 1966, stipulates payment of the cane price within 14 days of supply, failing which interest at the rate of 15 per cent per annum on the amount due for the delayed period beyond 14 days is payable.
However millers in Maharashtra, Karnataka, Uttar Pradesh and other States are insisting on the Centre's help to tackle the sugar glut.
Sugar production in India in the 2017-18 sugar season was about 322 lakh metric tonnes (lmt), much higher than the consumption of 255 lmt. Production during the current season is estimated to be about 315 lmt and consumption is estimated to be 260 lmt .
Against Minimum Indicative Export Quotas (MIEQ) of 20 lmt allocated to sugar mills for the 2017-18 sugar season, about 6.20 lmt was exported till September, 30, 2018. Similarly, against an MIEQ of 50 lmt allocated for sugar season 2018-19, about 2.54 lmt have been exported so far.
Meanwhile, some of the sugar mills in Maharashtra have started retail sales of sugar to fight the cash crunch. The Maharashtra Sugar Commissioner has given the go ahead to mills that want to sell sugar in retail.
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