Maharashtra Cabinet proposes to link cane prices to income of sugar factories

The Prithviraj Chavan-led government has,however,maintained it cannot compel the sugar factories to pay a stipulated prices and can only act in cases where the prices paid are below the FRP.

Wednesday’s Cabinet decision paves the way for the formation of a 14-member  Sugarcane Control Board,whose main function would to be decide sugarcane prices besides FRP on revenue-sharing basis taking into account the actual revenue realised from sugar generation and other byproducts like bagasse,molasses and press-mud.

The board,which will meet thrice during a crushing season,will be headed by the state’s chief secretary and comprise officials from the state’s cooperation,agriculture and finance departments. The government will nominate three representatives of cooperative sugar factories,two others from private sugar mills and five farmer representatives.

Under the proposed law,factories will be liable to pay the FRP as minimum price towards first installment as soon as sugarcane is supplied during a season.

The balance payment will be made subsequent to publication of the valuation of the mill’s half-yearly income.

All payments will be directly sent to bank accounts.

A source said the proposed law would work in the favour of the sugar mills as the prices would depend solely on their income. They need not match the prices paid by other factories,which has been the norm hitherto.

In Maharashtra,several senior politicians,including ministers,control sugar cooperatives and private mills. The Cabinet also withdrew a provision of rigorous imprisonment for a year for those who violate its norms. The new law also contains a  provision stating “no court can take cognisance of offences under proposed law except if there is a complaint raised in this regarded by an official representative of the Sugar Commissioner”.

A source said this would basically mean that dissatisfied farmers could not directly approach court against a factory over the pricing issue. Following the Cabinet approval,the state government will now table a Bill in this regard

before the state legislature.