Sugar mills in Maharashtra’s Marathwada region will begin the sugar season of 2015-16 fifteen days late, on November 1, top officials of the Western India Sugar Mills Association (WISMA)  said.  A decision to this effect was taken at a review meeting of the WISMA at Latur in Maharashtra. The season is slated to begin on October 15 in the rest of the state.

Marathwada region has 76-odd mills of which 54 are active. Last year, the region crushed around 190 lakh tonnes and this year the quantum is likely to go down to 125 lakh tonnes, BB Thombre, president, WISMA, said.

In view of the deficient rains, water availability has been a major issue in Marathwada, although the recent spell of rains eased the drinking water availability to a certain extent, he said. The acreage under sugarcane, however, has reduced, he said.

The decision to begin the season late has been taken in light of the reduced amount of cane and water availability, he said.

As per the condition laid down by the government, the mills have agreed to give an undertaking that they are willing to make the pending FRP dues within a month of start of the new crushing season, he said.

Earlier mills in Marathwada region that had been reeling under the effects of a drought had expressed their inability to undertake crushing operations in the coming sugar season. The mills had urged the Maharashtra government to run the mills since these mills lack both the wherewithal to raise funds and also make farmer payments. Thombre said that the mills had decided to crush cane to keep the industry alive. The mills, however, have decided to make Fair and Remunerative Price (FRP) payments to farmers in three installments as the rest of the cooperative mills in the state.

Mills had earlier proposed returning to the previous system of giving FRP in three installments to farmers. The mills had proposed  they  will pay up the first installment based on the pledge amount decided by the banks; the second installment will be paid by the end of the season and the third installment will be paid after the sugar is sold.

Thombre said that the first installment would be given as per the pledge amount decided by the banks and the remaining mills would be paid in installments. This decision, however, has been opposed by farmer organisations who maintain that FRP be paid in a single amount. Thombre pointed out that the mills have been facing problem since the 2014-15 season  and  the farmers were being paid in installments. This is a more practical decision, he said.

The total arrears from the 2-14-15 season amount to amount to Rs 2,600 crore. Millers are expected to make payments from the  R6000 crore soft loan announced by the Centre. Mills in Maharashtra are expected to receive around R2,400 crore.

Almost all mills now face problems relating to short margins and are finding it difficult to raise funds, he said.

Earlier Jayprakash Dandegaonkar, vice chairman, Maharashtra State Cooperative Sugar Factories Federation had said that 40 mills in the state face short margin issues. The millers have decided to pay a fixed advance for transportation for cane cutters at R2 lakh per vehicle and R25,000 per bullock cart.