FRP: Govt may crack down on sugar mills not adhering to 80:20 formula

Senior officials of the sugar commissionerate said around 40 mills might face action for delay in paying the farmers.

Written by Partha Sarathi Biswas | Pune | Published:February 11, 2016 1:20 am
Payment trends so far show that most of the mills have adhered to the formula, but have deferred payment. (Express Photo) Payment trends so far show that most of the mills have adhered to the formula, but have deferred payment. (Express Photo)

Sugar mills in the state that fail to adhere to the 80:20 formula for payment of Fair and Remunerative Price (FRP) to farmers might face action from the sugar commissionerate. Senior officials in commissionerate said the government may seize and auction the sugar stock of such mills.

The start of the present sugarcane crushing season saw Chief Minister Devendra Fadnavis chair a meeting of mill owners and growers about payment of the FRP. While the cane-growers, led by Swabhimani Shetkari Sangathana, had demanded the FRP in one installment, mill owners wanted to pay in three installments. After the meeting, it was decided that for the current season, FRP would be paid in two installment in the 80:20 formula.

Payment trends so far show that most of the mills have adhered to the formula, but have deferred the payment. As of January 31, the total payment due to cane growers was around Rs 9,060 crore. As per the 80:20 formula, the payment due calculates to Rs 7,248 crore. The actual payments made by the mills was Rs 6,064 crore – a shortfall of over Rs 1,000 crore. Three mills in the state that have failed to adhere to the formula are from the Solapur district.

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Senior officials of the sugar commissionerate said around 40 mills might face action for delay in paying the farmers.

The action can include seizure and auctioning of their sugar stock to recover the amount due, under the Revenue Recovery Act of 1890.

Meanwhile, mill owners say the increase in the cess on sugar has hit them hard, with the price of the commodity dropping by over Rs 100 in the market. Sanjiv Babar, managing director of the Maharashtra State Cooperative Sugar Factories Federation, said mills are finding it difficult to sell sugar. “Prices have again come down and there is hardly any demand in either domestic or international markets,” he said. Babar said the mills want to pay the growers, but market forces have played a dampener.

With winter coming to an end, mills in the state have started closing. As of Tuesday, 26 mills have closed their operations for the current season, with Nanded division witnessing the highest -11- such closures. Eight mills have wrapped up operations in Pune division.

The state has witnessed crushing of 547.95 lakh metric tonnes and production of 595.22 lakh quintals of sugar this season. At present, 177 mills (99 cooperative and 78 private) are still in operation.

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