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Sugar mills selling beyond allotted quota face scrutiny

Nanda Kasabe
Sugar mills selling beyond allotted quota face scrutiny

At least eight sugar mills in Maharashtra are under the scanner for selling the sweetener in more quantity than the prescribed limit, top officials at the state sugar commissionerate has said.

Of the 195 sugar mills in the state, 10 mills were found to have sold more than 100 % of their prescribed sales quota. This led to other millers raising doubts as to how these mills were able to do so when others were not able to find buyers for their product, Shekhar Gaikwad, Maharashtra sugar commissioner told FE.

Investigations have revealed that 8 of these 10 mills had sold more than their allotted quota and the matter will be reported to the Centre, he said.
Last year, the central government had reinstated the release mechanism in the sugar sector and imposed a monthly sales quota on each mill, in a bid to control supply of sugar and keep prices stable. The central government had also fixed the minimum selling price (MSP) of sugar at `3,100 per quintal and instructed mills to adhere to the directive.

The Centre had directed regional cane commissioners to take action against mills selling sugar below a government-mandated price. The sugar mills were facing a cash crunch as they also have to pay Fair and Remunerative Prices ( FRP) to buy cane from farmers at a time when there is a glut of sugar and they owed huge arrears to farmers. In Maharashtra, the arrears are to the tune of `5,000 crore.

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The sugar commissioner s office received several complaints about mills selling their stock below the MSP in order to raise funds to pay the FRP to the cane growers. Responding to such complaints, Gaikwad ordered an audit of the sales report of certain mills that were suspected of underselling their products. During the audit, eight mills were found to have violated the quota given to them and sold more than their stipulated stock. These mills will be called for a hearing and such mills can face penal action under the Essential Commodities Act, he said.

Action will be recommended under the Essential Commodities Act. Such mills could also be blacklisted from getting benefits from various government schemes including the soft loan scheme, export subsidy, he said.

As of March 15, sugar mills have managed to pay `14, 881.01 crore of the ` 20,653.02 crore they owed to farmers. But, with over `5,000 crore in cane dues, millers face possible action from the office of the sugar commissioner. Gaikwad has already ordered seizure of properties of 53 sugar mills that have failed to clear their dues.

Though the government has taken a number of measures, including increasing the minimum selling price of sugar from `2,900 per quintal to `3,100 per quintal, these have not helped the mills much.

As the crushing season nears its end, Maharashtra has almost touched last year s sugar production figures at 106.71 lakh tonne.

Last year, Maharashtra has produced 107 lakh tonne sugar, an all-time high production figure. Till Tuesday, of the 195 mills that have taken crushing in the season, only 27 mills are functional and at least three are expected to continue the season till May.The state has reported crushing of 949.01 lakh tonne cane and produced 106.71 lakh tonne of sugar.