Cooperative sugar mills had warned of delayed payment to farmers for cane procured due to the lending policy of the Maharashtra State Cooperative (MSC) Bank.
A month after the commencement of the crushing season of 2020-21, sugar mills in Maharashtra owe farmers Rs 351.54 crore in fair and remunerative price (FRP) arrears, according to the crushing data report shared by the Maharashtra Sugar Commissionerate.
The total FRP payments due to farmers amount to Rs 366.24 crore at the beginning of the season as only 48 mills began crushing operations in the first month. The Sugar Commissionerate had granted permission for crushing from October 15.
However, unseasonal rains delayed crushing in many factories. Besides, mills were facing issues related to working capital. As a result, many of them could not make full payments to farmers, senior officials at the commissionerate said. Mills crushed 160.76 tonne of cane during the month, the crushing report mentioned.
So far, mills have paid farmers only Rs 14.70 crore in cane payments, around 4.01% of the total payable FRP to farmers. Only one factory – Jawahar Sahakari Sakhar Karkhana – made 100% FRP payment to farmers. The factory has an installed capacity of crushing 12,000 tonne per day and has so far purchased 9,906 tonne from farmers at the rate of Rs 3,437 per tonne and reported a sugar recovery rate of 12.06%. Another factory made payment in the range of 89% to 99.99%.
Of the 48 factories that have commenced crushing, 46 have made less than 59.99% payments to farmers. Mills owe Rs 412.7 crore in FRP payments in the previous season.
Cooperative sugar mills had warned of delayed payment to farmers for cane procured due to the lending policy of the Maharashtra State Cooperative (MSC) Bank. MSC Bank has revised its earlier policy, and instead of providing 90% has gone back to disburse 85% of the sugar valuation as pledge loan.
Sugarcane plantation in Maharashtra has risen by 29% to 10.66 lakh hectare for 2020-21. Last year, the area was 8.22 lakh hectares. Total cane available for crushing is around 815.50 lakh tonne, compared with 545 lakh tonne in the previous season.
According to sugar commissioner Shekhar Gaikwad, production is likely to touch 92.15 lakh tonne. Around 187 mills are expected to participate in crushing this season.
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