Pune: Sugar mills to pay interest for delayed payment to growershttps://indianexpress.com/article/cities/pune/sugar-mills-to-pay-interest-for-delayed-payment-to-growers-6032699/

Pune: Sugar mills to pay interest for delayed payment to growers

The case dates back to the cane crushing season of 2014-15, when a drastic fall in sugar prices had seen mills failing to clear the minimum Fair and Remunerative Price (FRP) to growers for cane procured from them.

Sugar mills to pay interest for delayed payment to growers
The order mandates compulsory payment of cane dues within 14 days of cane being produced by the farmer. (File)

Sugar commissioner Shekhar Gaikwad on Thursday said that 20 sugar mills in Marathwada will have to pay 15 per cent interest to cane growers for their failure to clear cane payment on time for the season of 2014-15. Gaikwad gave the order while hearing a petition filed by farmer leader Pralhad Ingole. Mills controlled by the families of senior BJP ministers, including Pankaja Munde, state cooperation minister Subhash Deshmukh, as well as Congress leaders like Amit Deshmukh will be affected by this order.

The case dates back to the cane crushing season of 2014-15, when a drastic fall in sugar prices had seen mills failing to clear the minimum Fair and Remunerative Price (FRP) to growers for cane procured from them. Mills had pointed out how the fall in sugar prices had made it impossible for them to pay even the FRP, as a bumper crop had upset the supply and demand situation. Ingole, who back then was a member of the farmers’ union Swabhimani Shetkari Sangthana, had moved a petition before the Aurangabad bench of the Bombay High Court to ask mills to clear their cane dues, as well as pay farmers the 15 per cent interest due to them as per the Cane Control Order of 1966.

The order mandates compulsory payment of cane dues within 14 days of cane being produced by the farmer. Failure by the mills to do so can attract an interest of 15 per cent, something which very few mills in Maharashtra have done.

The High Court had asked the then sugar commissioner to take a decision regarding the matter, who had said that the cane dues were cleared, but had not taken a decision regarding the payment of the interest. Ingole, who had joined the Shiv Sena, had again moved the High Court, which had asked the sugar commissioner to take a decision.

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Regarding Gaikwad’s 18-page order, mills argued that payment of interest would result in laborious calculations, which they said was not feasible. It was also pointed out that they had cleared the cane dues despite financial pressure and that in some cases, the mills had paid more that than the FRP.

However, Gaikwad, in his order, refused to accept the argument of financial distress, as the state government had extended soft loans to the mills. While accepting that calculation of interest for individual farmers would be laborious, Gaikwad pointed out how feasible it would be, thanks to the usage of computers. In his order, Gaikwad asked the mills to submit their calculation of individual farmer dues within 30 days, and said that the regional joint directors of sugar and mills will be asked to pay interest within three months of the order.

Ingole, who is now with the Shiv Sena, welcomed the order and said it will result in over Rs 700 crore in way of interest being paid to farmers. However, Jaiprakash Dandegaonkar, president of Maharashtra State Cooperative Sugar Factories Federation, said the order will set a bad precedence, as calculation of interest is not feasible. “We will seek legal recourse to challenge the order,” he said.