Bihar government to provide remissions to cash-strapped sugar mills

By ​Sanjay Singh

PATNA: In view of the financial crisis which Bihar’s sugar industry faces, state cabinet on Tuesday cleared a proposal to provide a few remissions to sugar factories in order to enable them to pay proper price to the cane growers of their produce.


As per the decision, the state government would provide relief to mill owners in three different forms. First is rupees 21.75 per quintal subsidy to sugar factories on purchase of sugarcane. Second is remission from payment of purchase tax at the rate of 1.75 per quintal of sugarcane while third is reduction in commission to Zonal Development Council (ZDC) from 1.80 per cent of cane price to 0.20 of cane price for the season 2015-16.

The condition for the sugar factories is that they would purchase sugar cane growers’ produce at the rate of 270 per quintal (early variety), rupees 260 per quintal for general variety and rupees 250 per quintal for low variety.

Sources said government authorities had held a meeting with the representatives of Bihar Sugar Mills Association on December 30 and discussed their problems. “Citing lowering of sugar prices in the recent past and financial crisis in the sugar industry, the association claimed that they find difficulty in paying a remunerative cane price to cane growers. In the crushing season 2015-16, they informed the state government that they can pay at the rate of approximately rupees 1.90 per quintal,” a source in the state’s sugar industry department told ET.

As per the sugarcane control order, the central government has fixed the FRP (Fair and Remunerative Cane Price) for the season 2015-16 at rupees 230 per quintal up to 9.5 per cent recovery and it has also taken a decision to pay a subsidy of rupees 4.50 per quintal if the factories comply with the direction of the central government regarding export of sugar and ethanol manufacturing.

The matter finally reached before the chief minister during his review meeting of the sugarcane industry department in the last week of December. Bihar has 11 sugar mills.