As many as 159 sugar mills in Maharashtra have applied for crushing licences for the sugar season of 2019-20, against 195 mills the previous season. Thursday is the last date for millers to apply for the crushing licences.

The 2019-20 season has already been delayed by a month because of floods and the Vidhan Sabha elections in the state. The season is likely to commence after the formation of a new government in the state.

Maharashtra sugar commissioner Shekhar Gaikwad told FE that the Commissionerate will not grant licences to factories that have failed to make Fair and Remunerative Price (FRP) payments to farmers.

According to the latest FRP arrear report released by the Commissionerate on October 30 reveals that millers still owe 328.04 crore to farmers in FRP payments, translating to 1.41% of the total dues.

Around 50 factories still have FRP dues and the Commissionerate has issued Revenue Recovery Code (RRC) to 97 factories for the season of 2018-19.

Last season, 195 factories had participated in crushing operations and had undertaken crushing of 952.11 lakh tonne of cane to produce 107 lakh tonne of sugar.

As per the report, some 145 factories have made 100% FRP payments, 41 factories made payments between 80-99%, seven factories made payments between 60-79% and two factories made less than 59% payments.
Last season, the Commissionerate has been pretty aggressive on the recovery of cane payments from factories.

Recently, the Maharashtra sugar commissioner had earlier penalised 20 sugar mills in Marathwada to pay 15% interest to cane growers for their failure to clear payments on time for 2014-15 season.

Significantly, hereon, sugar mills in Maharashtra will get their crushing licences for the new season, subject to the condition that they agree to pay up Fair and Remunerative Price (FRP) dues of farmers within 14 days as per the Sugarcane Control Order, 1966.

From this crushing season, sugar millers in Maharashtra will not be able to continue with a common agreement accounting for a possible delay in the Fair and Remunerative Price (FRP) payment to farmers.
According to the sugar commissioner’s new directives, millers instead will have to sign agreements with individual farmers ahead of the crushing season. Normally, during the annual general body meeting, some mills signed an agreement with the member farmers, stating that they may not be in a position to make the full single payment.

Such agreements helped mills escape any possible action by the commissionerate. This time, anticipating such move, the sugar commissioner has made it clear that such agreements will not be considered valid. Millers instead would have to sign agreements with individual farmers, he said.

According to Gaikwad, around 570 lakh tonne of cane is expected to be available for crushing this season and the production is likely to drop to 64 lakh tonne instead of 107 lakh tonne in the previous season.
The season is expected to close in a couple of months because of cane shortage.

With cane growing districts in Maharashtra reporting losses due to floods, as many as 50 sugar mills in the state are unlikely to crush cane for the sugar season of 2019-20 due to lack of cane availability.

BB Thombare, president, Western India Mills Sugar Mills Association (Wisma) had earlier stated nearly 35 mills from Marathwada region that has been reeling under the effect of a drought and 15-20 mills in Solapur region may not be able to crush cane in the coming season.