Two months since Maharashtra’s sugarcane crushing season began, payment pains have already started plaguing the sector. State Sugar Commissioner Shekhar Gaikwad’s office has identified 16 sugar mills across the state which have delayed their first payments to farmers by over 45 days. Showcause notices have been issued to such mills, and the commissionerate hopes the notices will prompt other mills to not default in payments in the days to come.
The action, relatively early in the season, is to ensure that mills do not default in payments later in the season. The Sugarcane Control Order of 1966 mandates mills to clear their payment within 14 days of procuring of cane, failing which action can be taken against them.
Of the 16 mills, six are from Solapur, two are from Sangli while two mills are in Ahmednagar and the remaining six mills are in Marathwada.
Speaking to The Indian Express, Gaikwad said offices of the regional joint directors of sugar were asked to identify mills which have failed to pay within 45 days of crushing. “Such mills have been issued showcause notices on why the payment was delayed,” he said.
Maharashtra is expected to crush 873 lakh tonnes (lt) of cane and produce 99 lt of sugar in the present season. Liquidity is going to be an issue with the mills, which are already facing sluggish sugar sales and financial problems. Exports seem unlikely as the central government is yet to announce a subsidy programme, without which exports would not be financially feasible. Mills have also raised the issue of Rs 6,900 crore worth of government subsidies, yet to be released to them.
Till November 30, mills had procured 175.18 lt of cane, for which they were to pay Rs 1,992.58 crore in way of the government-declared Fair and Remunerative Price (FRP) of Rs 2,850 per tonne. However, mills have paid Rs only 496 crore till now, running up arrears worth Rs 1,495.98 crore.
Only 28 of the 135 mills which have taken season have cleared 100 per cent of their payment, with 107 mills running up arrears. More than 103 mills have high arrears of nearly 60 per cent.
Due to good availability of cane, almost all mills have started their operations in the state — 171 of them are reported to have started till Sunday. However, the sugar commissioner said payment issues may assume significant proportions by the end of the season.
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