Sugar millers in Maharashtra are awaiting clarity on the new formula announced by the Centre to calculate production subsidy to factories for the ongoing 2015-16 season after taking into account lower production and exports.

Mills that continue to owe fair and remunerative price (FRP) dues to farmers are now waiting for the notification from the government so that they are in a position to know how much funds they have on hand to make payments to farmers. The Maharashtra Sugar Commissionerate that had called for hearings against mills that owed more than 95% of the quantum of FRP dues decided not to take any action against these mills as they sought additional time to make payments.

According to Vipin Sharma, state sugar commissioner, the millers are awaiting the notification so that the export quota of each mill can be calculated and payments can be made to farmers accordingly. Those millers who have already made payments will have funds on hand to other purposes, he said. The commissioner said that he had already held discussions with officials in Delhi and was now awaiting the notification.

The production subsidy was initially calculated based on the estimated cane crushing of 255 MT in the 2015-16 season. But the cane crushing has come down due to drought. Consequently, sugar output is also estimated to be lower at 25.2 MT this season.

Initially, the export quota target was scaled at 15.70 kg of sugar for each tonne of ‘estimated cane crushing’. Now, the export quota would be revised on a scale of 15.70 kg of sugar for each tonne of cane ‘actually crushed’ by the mills during current season or previously notified export quota target, whichever is lower.