Mills across the state are finding it difficult to raise funds to pay sugarcane growers the basic fair and remunerative price (FRP). A meeting of sugar millers from Sangli and Kolhapur region, the sugar bowl of Maharashtra, was held on Friday, but its participants couldn’t agree to a formula on the payment of FRP.
Two months since the beginning of the current crushing season, only 29 per cent of cane arrears have been paid. As on December 15, of the Rs 5,026.79 crore payable, mills have paid Rs 1,469.49 crore, with cane arrears of Rs 3557.29 crore being registered.
Most mills, which have paid FRP, have done so in installments, with 80 per cent of the amount paid up front while the rest will be paid later.
At the beginning of sugar season, millers from the region had agreed to pay the basic FRP at one go, as the first installment for farmers. This formula was decided on after millers held talks with cane growers’ unions. The FRP this year is Rs 2,750 per tonne for cane, with a base recovery rate of 10 per cent.
Now, as cane dues rise, most mills are looking for a solution that will allow them to pay the FRP in installments.
As the current release mechanism has prevented sugar mills from undertaking bulk sale of sugar, they are facing a liquidity crunch. Over the last few weeks, sugar prices have hovered around the Rs 29 per kg mark, but millers say there are hardly any takers for sugar even at this price.
Millers looking to export the commodity have faced another hurdle: banks have asked millers to pay Rs 9-10 per kg to release the sugar stock for export markets. Millers have urged the government to intervene and sought a relaxation of such norms.
Swabhimani Paksha MP and farmers’ leader Raju Shetti, however, opposed the millers’ plan to pay FRP in installments. “We are ready to wait a bit longer but will not allow payment of FRP in installments,” he said.
As farmers in the cane belt grow restive over unpaid bills, Shetti said a meeting on the issue will be held in Kolhapur on Saturday.
Meanwhile, the next move by Shetti, who is expected to join the Congress-NCP alliance in the state, will be watched closely, as most millers are politically aligned with the two parties. Shetti, however, said, “Even if we join the alliance, we will agitate over the FRP issue. If need be, we will hit the roads and stop the transport of cane to force the millers to pay us.”