Legal notices are being issued to several sugar mills in Maharashtra for non-payment of fair remunerative price (FRP) for the new season. Mills have been asked to reply to the notices in a week failing which they have been called for hearings for recovery proceedings to be held at the State Sugar Commissionerate in the next three days.

Almost all mills in Ahmednagar, Pune, Solapur, Kolhapur and Sangli have received these notices. The first instalment of cane payment in Maharashtra is expected to be either on par with FRP or more than FRP. This year, in the absence of any decision on the first instalment, mills have been instructed to pay FRP rates to farmers.

Confirming the development, Maharashtra sugar commissioner Vipin Sharma said the primary notices were issued by the regional joint directors (RJDs) in their respective regions for non-payment of FRP. “Normally, the first instalment of cane payment is made to mills after 15 days of the start of the season. This year, the season began early from November 1. However, a majority of mills in the state are yet to make cane payments to farmers,” Sharma told FE.

“A status report which speaks of the deficit in the sugar rates this year and the increasing cost of production has been sent to the state government with a recommendation for measures to be taken by the government,” he said.

The FRP for 9.5% recovery has been fixed at R2,200 a tonne and there will be a rise of R232 a tonne for every 1% rise in recovery. For 11% recovery, FRP comes to R2,650 a tonne.

Sanjiv Babar, MD, Maharashtra State Cooperative Sugar Factories Federation ( MSCSFF) said that several mills have been issued legal notices for non-payment of FRP. “The sugar industry in Maharashtra is on the verge of collapse. Sugar prices have fallen and several mills with a negative networth who are not in a position to raise finances have no option but to resort to distress sales,” he said.