Around 55-60 sugar factories of the 178 factories in Maharashtra may not be able to crush in the season of 2016-17 because of the ongoing drought situation in the state. Those mills that crush cane in the new season may not be able to crush more than 25% of their capacity and not a single sugar factory in the state will be able to crush to full capacity. This was the concern expressed by a top-level delegation led by former deputy CM Ajit Pawar and industry representatives that met chief minister Devendra Fadnavis in Mumbai.
According to the delegation members, this would cause a loss of around Rs 2,150 crore and factories will also run into losses because of their inability to crush cane. Shivajirao Nagawade, chairman, Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), said that millers raised a demand for the restructuring of loans since factories would not be in a position to make loan repayments.
A demand for providing subsidy for drip irrigation for cane was among the solutions discussed during the meeting, which was positive, he said. Nagawade said the industry will appeal to the Centre and the state government to restructure loan worth R2,792.71 crore due to weak financial conditions.
“’The factories were forced to seek loan from banks and financial institutions, as since the last three years, they had faced drought apart from volatility in sugar prices. They are not in a position to repay the loans within the given time and therefore need for rescheduling,”’ he noted.
CM Fadnavis assured the millers that the state government would consider providing soft loans to the sugar factories in Marathwada, Solapur and Ahmednagar, the areas worst hit by drought. Fadnavis said the successive drought situation, and reduced cane and sugar production, had resulted in a situation where it would be difficult to operate the factories for the 2016-17 crushing season. He added he would take up the issue with the Union government.
State cooperation minister Chandrakant Patil said that his department has issued seizure notices to 20 sugar factories for non-payment of fair and remunerative prices (FRP) to cane farmers. He said there were very few factories that were yet to pay the dues, and the government was ready to wait till May 31 before initiating the seizure.
Fadnavis also told the delegation that the stock limit policy was determined by the Union government and he would follow it up with them. He informed the delegation that the issues pertaining to increasing target for co-generation to 1,000 MW for sugar factories and bagasse production from the sugarcane residue would be verified before arriving at any decision. Nagawade said the industry will also make a plea to reconsider the sugar export policy following drastic fall in sugar production due to sugarcane loss in the present drought and its use as fodder in drought hit districts.