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Tuesday, April 20, 2021

Maharashtra sugar mills demand transport subsidy, FRP payment in parts for survival of industry

As against the quota of 32.03 lakh tonnes, mills in the state have sold only 21.66 lakh tonnes of sugar. On the other hand, mills in Uttar Pradesh, whose combined quota was 41.57 lakh tonnes, had sold 44.69 lakh tonnes of sugar.

Written by Partha Sarathi Biswas | Pune |
April 2, 2021 12:31:38 am
Sugar mills MaharashtraBefore 2009-10, mills in Maharashtra used to pay FRP in three installments with 75 per cent of the FRP being paid within 14 days of cane delivery.

Maharashtra’s sugar industry has asked for Rs 150 crore as transport subsidy this season to help it regain its traditional market in north and east India.

During a high-level meeting chaired by Deputy Chief Minister Ajit Pawar recently, industry representatives also asked the central government to allow mills in Maharashtra to pay the Fair and Remunerative Price (FRP) for cane purchased from farmers in three installments in line with the system prevalent in Gujarat.

The meeting was attended by several senior ministers and representatives of the sugar industry.

Praful Vithlani, founder chairman of All India Sugar Traders Association(AISTA) who was also present in the meeting, pointed out how mills in Maharashtra had failed to sell their quota of sugar in the past five months.

As against the quota of 32.03 lakh tonnes, mills in the state have sold only 21.66 lakh tonnes of sugar. On the other hand, mills in Uttar Pradesh, whose combined quota was 41.57 lakh tonnes, had sold 44.69 lakh tonnes of sugar. Of 104 lakh tonnes combined quota between October and February across the country, mills have dispatched 99.34 lakh tonnes of sugar.

Low sales in Maharashtra, said Vithlani and other industry representatives, were mainly due to loss of traditional north and east India markets. These markets are now being captured by mills in Uttar Pradesh, which have the distance advantage over their counterparts in Maharashtra.

So, mills in Uttar Pradesh are able to sell sugar at lower rates than those in Maharashtra. During the presentation, the industry has strongly asked for a Rs 1.50 per kg of sugar sold as transport subsidy for out of Maharashtra sales. Vithlani said this subsidy should be given only to mills that are able to produce railway receipts as proof of sugar sales.

Another issue that was discussed was payment of FRP in three installments. Such a model is in vogue in Gujarat and has also been recommended by the Niti Aayog.

Before 2009-10, mills in Maharashtra used to pay FRP in three installments with 75 per cent of the FRP being paid within 14 days of cane delivery. The other two payments were made in equal installments after the season ended and before the start of the next season.

It was decided that the first matter will be taken up during the next Cabinet meeting and the state government will write to Union Minister Nitin Gadkari about the other issues.

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