Sugar mills in Maharashtra have been directed to pay 80% fair and remunerative price (FRP) to farmers for the 2015-16 season by the end of this month to avoid any penal action. As of December 15, 2015, mills owe R2,600 crore to farmers for the ongoing season.
Following a meeting in Pune on Friday, the mills have been given a deadline of December 31 to adhere to the 80:20 FRP formula for the current season as directed by CM Devendra Fadnavis.
Speaking to the FE, sugar commissioner Vipin Sharma said that he had called for a meeting of all the 170-odd mill owners and they were asked to make FRP payments as per the 80:20 formula that they had agreed to at a meeting called by the CM at Nagpur recently.
As per this formula, the 80% cane payment works out to around R2,100 per quintal. However, several mills have been paying around R1500-1700 per quintal.
Sharma said that he would wait for the December 31 arrears report to understand how many mills have made the 80% payment as per their commitment and then may take action which could include issuing of Revenue Recovery notices (RRCs).
Farmer organisation Swabhimani Shetkari Sanghatana that had brought crushing to a halt in some of the factories in Kolhapur region has now called off their agitation following the assurance given by the mills to the commissioner.
Millers in Kolhapur in meeting on Wednesday agreed to pay 80% of FRP as per the formula. Three private mills including Dalmia Sugar were allowed to begin crushing operations again after they had given in writing that they would pay as per the 80:20 formula. Kolhapur region has 22 sugar mills and is considered the sugar bowl of Maharashtra.
Of the total dues of Rs 2,957 crore as on December 15, millers had paid only Rs 366 crore.
Meanwhile, pending FRP arrears for the last season have come down from Rs 670 crore to Rs 450 crore. Sharma said that mills had paid up Rs 220 crore in the last couple of weeks and some of the mills had given an assurance that they would make remaining payments in the next two to three days. These involve the 71 mills that had given affidavits stating that they would make payments for the pending dues of the last season within a month of commencing crushing operations for the new season.
Jayprakash Dandegaonkar, vice-chairman, Maharashtra State Cooperative Sugar Factories Federation, said that mills have been given time till December 31 to make 80% of the FRP payments for the current season. Because of the pressure to make the 80% paymetns, mills will now delay drawals against their accounts so that more sugar bags are accumulated and they are able to get more money.