Maharashtra government warns sugar mills to clear dues worth Rs 2,000 crore by December 31

PUNE: Maharashtra sugar commissionerate has set an 'informal' deadline for the sugar millers in the state, asking them in 'stern' language to pay Rs 2000 crore they owe to the sugarcane farmers, for the cane that has been crushed in last two months. The Swabhimani Shetkari Sangathana (SSS), which had stopped cane transport in south Maharashtra, has announced to withdraw their agitation against the government.

The sugar industry representatives had agreed to pay 80% of the legally binding fair and remunerative price (FRP) as the first installment of cane payment in a meeting chaired by Chief Minister Devendra Fadanvis. Even two months after using farmers' cane, millers had paid only 12% of the total cane dues in the ongoing crushing season.

As some mills paid their first advance lower than the agreed price, SSS had disturbed cane crushing in Kolhapur-Sangli region of Maharashtra from Monday.

Of the total dues of Rs 2957 crore as on December 15, 2015, millers had paid only Rs 366 crore. According to the 80:20 formula agreed upon by industry and the farmers' organisations, sugar mills have to pay total Rs 2365 crore of cane payment. As Rs 366 crore has been paid so far, the sugar commissionerate has asked the millers to pay the remaining Rs 2000 crore by December 31.

"We gave strict warnings to the sugar mills to pay as per the 80:20 formula and may initiate actions against those who do not clear their dues by December 31," said an official who did not want to be quoted.

A spokesperson of the Swabhimani Shetkari Sangathana said, "We have withdrawn the agitation against the government as millers have agreed to pay 80% of the FRP as first advance. However, we will continue to agitate against individual mills, which do not pay this price."

With ex-mill sugar prices rising to Rs 28/kg for the lowest grade S-30 sugar, sugar mills have started getting better realisation for sugar. However, the mills which have high loan components, had expressed their inability to pay as per the 80:20 formula.