Sugar mills in the state have agreed to abide by the state government’s 80-20 formula for payment of the Fair and Remunerative Price (FRP) to cane growers for the present crushing season.
In a meeting of managing directors (MD)s of the mills presided over by the sugar commissioner Dr Vipin Sharma in Pune on Friday, the mills have promised that they would pay by the formula, but it would not be possible for them to pay the farmers fortnightly.
Sugar mills in the state have been operational for almost two months, yet the schedule of payment of FRP had not been fixed. The accumulated unpaid dues of the current season stands at Rs 2,000 crore.
Last week, the chief minister had chaired a meeting with mill owners and sugarcane growers where the 80-20 formula was decided upon.
The first instalment would constitute 80 per cent of the FRP amount and the 20 per cent would be the second instalment of the amount.
Mill owners had stated that they were not in a position to pay the 80 per cent of the FRP at one go.
Cane growers led by Swabhimani Shetkari Sanghathana had stopped crushing in seven mills in Kolhapur in protest against failure of the mills to declare FRP in tune with the formula. Sharma had called the meeting to discuss the matter and give directions to the mills.
During the meeting, Sharma impressed upon the mills that the 80-20 formula was decided upon at the meeting chaired by the chief minister, so it had to be followed.
“The commissioner also said that although the crushing season had started, there had not been any payment.
Given the situation of the industry, any action was avoided but now mills were instructed to heed to the same,” said a senior officer who attended the meeting.
In response to the argument by mills that there still remained a gap of Rs 300-400 in the payment of FRP, officers pointed out how that could be realised given the increase in sugar prices.
Although mills have agreed on paying the FRP in the above formula, managing directors said it would not be possible to adhere to the time-table of fortnightly payment of the amount.
“We will make ends meet and pay, but if it is expected that we pay every fortnight, it will not be possible,” said industry sources.
They also said that by the end of December, most of the mills would try to pay the first instalment as per the formula but it would take time for the remaining amount to be paid.
Meanwhile Jaiprakash Dandegoankar, the vice-president of the Maharashtra State Cooperative Sugar Factories Federation, said the mills would be forced to go for future trading of sugar and molasses to set their accounts right.
“In such trading, the mills normally end up losing money, but as the government has asked for the above payment schedule (for cane growers), we will have to agree to that,” he said.