Maharashtra : Fifteen sugar mills face action for non-payment of dues to farmers
Fifteen sugar mills in Maharashtra face action for failing to pay farmers the Fair and Remunerative Price (FRP) for sugarcane. Of the ₹28,231 crore owed, ₹1,432 crore remains unpaid. With crushing nearly over, the sugar commissioner’s office is pushing for quick settlements, issuing recovery certificates where needed. Despite high sugar prices, mills face financial stress due to low-capacity crushing and mounting loans.
Fifteen sugar mills in Maharashtra have faced action from the sugar commissioner’s office for failing to clear payment to farmers for cane purchased from them. As of April 1, the report issued by the sugar commissioner’s office shows that of the total Rs 28,231 crore to be paid to farmers by way of Fair and Remunerative Price (FRP) of cane, mills have paid Rs 26,799 crore, running up arrears worth Rs 1,432 crore.
With cane crushing almost over this season, the sugar commissioner’s office is now ensuring dues are cleared as soon as possible. Mills are required to pay their farmers full FRP within 14 days of cane purchase. Failure to do so can result in action, which allows the sugar commissioner’s office to issue revenue recovery certificates (RRC). These certificates allows the dues to be recovered as arrears in revenue — mostly revenue officers order auction of sugar stock to recover the dues.
A short season notwithstanding, sugar prices have remained more or less on the higher side. But mills have struggled with mounting operational losses as most have been forced to continue crushing below capacity. Of the 200 mills which crushed cane this season, 105 have cleared 100 per cent of their dues. Fifty mills have paid between 80 per cent and 99.99 per cent of their dues, 30 mills have paid between 60 per cent and 79.99 per cent of their dues, while 14 mills have cleared less than 40 per cent of their total dues.
Questions over the final production figure have put uncertainties about the opening balance of the 2025-26 cane crushing season. It has ranged from 44 lakh tonnes (as per the National Federation of Cooperative Sugar Factories Ltd) to 54 lakh tonnes (as per the Indian Sugar and Bio Energy Manufacturers Association). The central government has allowed exports of 10 lakh tonnes of sugar, of which mills have concluded trade of 6 lakh tonnes. International sugar prices have dipped slightly with the Food and Agriculture Organisation (FAO)’s March indices going down by 1.6 points. This was mostly due to weaker than expected demand.
India’s production figures have caste a shadow over availability for the next few months. Vijay Autade, a senior analyst of the sugar industry, said the reason for many mills failing to pay their FRP is the skewed economy of sugar. “ Mills pledge their sugar stock with banks to raise working capital. At present the sugar valuation is done at Rs 3,500/quintal and banks provide 85 per cent of this as pledge loan. However, banks deduct security deposit and thus the in-hand money to pay FRP does not suffice. Mills also service old loans, which they had taken to pay FRP. Overall, year-on-year mills are caught in a vicious cycle over FRP payment,” he said.
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Source : The Indian Express
