Pune: At a time when governments are under pressure to clear sugarcane dues of farmers before the general election, Maharashtra’s sugar industry and the office of the sugar commissioner have come together to expose and stop price undercutting by financially distressed sugar mills. 
 

The development comes after the directive issued by the Centre to sugar producing states to ensure that mills sell sugar at the minimum support price fixed by the Centre and clear the dues of farmers. The Centre had asked sugar commissioners of sugarproducing states to take action against mills that sell sugar below the MSP. 

Shekhar Gaikwad, sugar commissioner of Maharashtra, said: “It came to our notice that some sugar mills were resorting to illegal practices and doing price cutting. Traders are adopting various techniques to cut sugar price.” The commissioner called a meeting of all sugar millers to direct them to adhere to the MSP. 

Mills use various means to circumvent MSP, said people aware of the matter. Some mills are selling sugar at Rs 3,100 per quintal, the minimum ex-mill price without taxes set by the government, and paying back Rs 200-300 per quintal to buyers, they said. Others are selling sugar at Rs 3,100 per quintal and showing Rs 200 per quintal as credit given to buyers, which appears to be legal on paper. Some mills have given more sugar to traders than they have shown as being sold to them on paper. “As their sugar is not pledged with banks, it is not possible to check how much sugar they had produced. They can tweak recovery figures to tweak sugar production figures,” said Gaikwad. 

The government is thinking of applying the Essential Commodities Act at the secondary and tertiary levels as many of these players have not implemented MSP. BB Thombre, president of West Indian Sugar Mills Association, said: “We have unanimously demanded that strict action be taken against rogue mills and we will help the officials expose such mills.” Higher quota allocated by the government for March compounded the problems of the mills.