Sugar millers from Kolhapur and Sangli for the first time in many seasons have decided to give sugar to farmers in lieu of cane payments. Kolhapur and Sangli regions are in the sugar belt of Maharashtra.
On January 28, about 5,000 farmers who were part of the Swabhimani Shetkari Sanghatana (SSS) had protested outside the Commissionerate office in Pune to demand pending dues from millers.
Following this protest, more than Rs 3,300-crore FRP payments were deposited in farmer accounts within a fortnight after the Maharashtra sugar commissioner issued Revenue and Recovery Code (RRC) notices to 39 mills. By January 31, millers cleared dues of Rs 3,297.48 crore to farmers. Maharashtra s cane arrears that had crossed Rs 5,300 crore by mid-January have come down to Rs 4,841.15 crore by the month-end.
Nationalist Congress Party leader Hasan Mushrif said millers in Kolhapur and Sangli had decided to give sugar to farmers in lieu of cane payments, subject to their willingness. Farmers who wish to avail this could apply to their respective mills and would receive sugar against the payment for his cane after taking the conversion cost into consideration, he said. Sugar will be given after adjusting the pledge amount, the conversion cost and will be given in 50 kg packs.
Sugar commissioner Shekhar Gaikwad had earlier given an in-principle approval for making cane payment in the form of sugar after the arrears had shot up to Rs 4,576 crore in the middle of January. He later admitted technical issues in implementing this move.
The Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), however, is not willing to take this route. Jayprakash Dandegaonkar, chairman, MSCSFF, told FE that while millers were willing to give sugar to farmers in lieu of the FRP payments, farmers were not willing to take up this offer.
Farmers are willing to take delayed payments and several factories have signed contracts with farmers prior to the beginning of the season to accept default in payments or payments in instalments. There is a provision in the Cane Control Act, 1966, whereby millers and farmers can enter into contracts with regard to FRP payments, he said.
He said the government would now have to reconsider the action taken towards RRC since the status had improved and several mills had made more than 80 percent payments.
We have been waiting for such a long period for the export subsidy dues from the Centre and have also been hit by the fall in sugar prices in the domestic market , he said. Despite the minimum floor price of Rs 2,900 per quintal fixed by the government, demand has been subdued in the market leading to a stockpile in the state. Notwithstanding the lack of demand, millers cannot sell below Rs 2,900/quintal in the market, he said.
The competition from Uttar Pradesh (UP) has put pressure on mills in the state and markets that were traditionally served out of Maharashtra are now being served by UP. Millers are yet to receive the interest component of the soft loan promised by the Centre and state government. The federation has approached the government seeking financial assistance.