Sugar mills in Maharashtra are hoping for some succour with raw sugar export subsidy claims made for 2013-14 season likely to be released by the Centre by this month end. However, millers are still awaiting subsidy payments for 2007-08 and 2008-09 seasons as there is no provision for payments beyond the allotted quota, senior officials said.

This time as well the announcement regarding the export subsidy of R4,000 per tonne has come in late. According to Sanjeev Babar, MD, Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), of the total subsidy bill submitted by mills for R200 crore, the Centre has cleared documents of mills for subsidy claims of around R130 crore.

These payments are likely to be cleared by the end of the month, Babar told FE. However, payments for claims made for subsidy for the period 2007-09 are still pending with the Centre, he said. “The government in this period had announced a quota of about 60 lakh tonne which was to be given on a ‘first come first serve’ basis. However, the mills who came in later are not being considered eligible for subsidy on the grounds that there is no legal provision  for clearing these payments,” he explained. As many as 9 sugar factories are planning to approach the Bombay High Court on this issue, he said.

This year, factories have been struggling with cane payments. Of the total cane payments of R12,960 crore, the arrears are in the tune of R2,620 crore. Millers have been waiting for subsidy amounts to make cane payments, industry officials said.

In  November last year, sugar factories in Maharashtra had put up a bill of R140 crore to the Centre seeking claims against the export subsidy granted by the government for the period 2007-08. Mills in the state  had claimed that these bills have been pending with the government for the last three years. They had also been seeking an extension on the subsidy for the current season on the grounds that it will be easier to make cane payments to farmers if this issue is resolved.

MSCSFF chairman Vijaysinh Mohite Patil had met Union food minister Ram Vilas Paswan and urged him to look into the long pending issue of claims on subsidy given on raw sugar exports.

According to Babar, the export subsidy for the period 2007-08 was R1,350 per tonne on a total amount of 60 lakh tonne. According to information received from the Centre by federation officials, some 1,235 claims with estimates of around R805.17 crore are pending with the government. The Centre is reported to have processed claims for R60 lakh and is yet to take a decision on the remaining claims, senior officials said.

Around 106 factories from Maharashtra had submitted a list of 386 claims and petitions of 9 sugar mills are being heard in various courts The subsidy scheme, which was announced by the then UPA government in February last year, ended in September. The Centre had in February announced a subsidy for export of raw sugar up to 4 million tonne during 2013-14 and 2014-15 marketing years (October-September) in order to help the cash-starved industry to clear arrears to sugarcane farmers.It had fixed the subsidy at R3,300 per tonne for February-March and decided to review it every two months.

The incentive was reduced to R2,277 per tonne for April-May and the same was reinstated at R3,300 per tonne by new food minister Ram Vilas Paswan. For August-September, the subsidy was R3,371 per tonne.