Around 28 sugar factories from Maharashtra find themselves in the dock for not having paid fair and remunerative price (FRP) dues for the season of 2014-15. These mills now find themselves liable for the cancellation of crushing licences for the current season, in addition to revenue recovery certificate orders, top officials of the Maharashtra Sugar Commissionerate said.
Notices are likely to be issued in a couple of days to these factories for their failure to have paid their FRP dues for last year’s season, Vipin Sharma, Maharashtra sugar commissioner, said. Pending FRP dues for the last season come upto R670 crore.
According to Sharma, some 71 factories had given affidavits that they would paid up pending dues within a month of starting the new crushing season and following their failure to pay up were summoned for hearings to the commissionerate on Tuesday. Of these 36 factories, eight factories produced proofs of payment of some R50 crore in pending dues to farmers, Sharma said. The remaining 28 factories that were unable to furnish any kind of proof of payment will now attract notices for cancellation of their crushing licences for the current season, a penalty of R500 per tonne for crushing of cane in addition to RRC (revenue recovery certificate) notices. The remaining 35 factories will be called for hearings by the end of this week, he said.
The commissioner said that a meeting of all the managing directors and chairmen of the sugar factories in the state has been called on December 18 to sound them out about the 80-20 FRP payment formula decided by the Maharashtra chief minister for the current season. These factories will be given a review so that they start payment next week onwards before any action is taken against them.
According to top industry sources, both CM Devendra Fadnavis and cooperation minister Chandrakant Patil, after the meeting held in Nagpur on the FRP payment issue last week, are very serious about the issue and therefore mills are liable to face action unless they begin paying up. The CM last week had directed sugar mills in the state to pay up 80% of the fair and remunerative price (FRP) to farmers on the completion of the first 14 days of crushing operations.
Millers have been given time to make the remaining 20%. He had made this announcement of the 80:20 formula after chairing a meet of all the stakeholders at the ongoing winter session of the state legislature in Nagpur. Millers, however, say it will be difficult for them to make 80% payment in a such a short time and suggested that they will be able to pay FRP per the pledge amounts released by banks.
Chandrakant Patil, Maharashtra cooperation minister, had said it is now binding on the mills to pay 80% of the FRP amount to farmers after a fortnight of crushing operations. Shivajirao Nagawade, chairman, Maharashtra State Cooperative Sugar Factories Federation, however, had termed this as a one-sided decision and although the mills will make all efforts it will be difficult for them to pay up as per the formula decided by the state.
According to industry experts, the first installment of the R1,100 crore loan given under SEFASU comes up in March. The first installment is to the tune of R694 crore and next year April onwards, mills also have to pay the first installment of the soft loan which comes upto R400 crore.
Should the mills default on these payments, the interest burden would increase and banks would stop giving further loans to the factories, experts said. Moreover, sugar employees have threatened an agitation from January 2 onwards unless their wage hike demands are met which would add to the financial burden of mills. Now that the hearings have begun for the last season and the mills are also likely to be told to pay up for the current season, it remains to be seen how the mills manage their finances.
Farmer leader Raju Shetty who has been agitating for FRP payment in a single amount said that he had relented on the request of the CM and warned that if the mills do not pay up according to the directions, they would face an agitation.
Payment woes
Around 28 sugar factories from Maharashtra find themselves in the dock for not having paid fair and remunerative price (FRP) dues for the season of 2014-15.
These mills now find themselves liable for the cancellation of crushing licences for the current season, in addition to revenue recovery certificate orders, top officials of the Maharashtra Sugar Commissionerate said.