Demolishing financial stability of Sugar Industry stresses factories and organizations in Maharashtra

Stagnant domestic demand, repressed prices, minimal or no exports and an expansion in prices of sugarcane without comparable ascent in the sugar price have added to the concerns of sugar mill operators and the organization that needs to guarantee that the standing sugarcane gets squashed on schedule.

Sugar plants are selling sugar beneath the minimum selling price of Rupees 31 per kilo ex-mill as request is curbed because of winter, while trades have not begun at this point because of postponement in declaration of the new export policy for 2020-21. Sugar factories and mills from the state of Maharashtra are stressed over gathering of cane deposit deficit and have appealed to the administration to not make a cruel lawful move against them for deferred cane payment. 

"Increase in the fair and remunerative price (FRP) without the relating increment in the selling price of sugar along with the urgency of the administration to pay the FRP to the farmers inside 14 days has upset the financial strength of the sugar business industry of the Maharashtra state. The sugar mills need to support loans they have been taking throughout the years to clear cane overdue debts," said Vijay Autade, a sugar industry advisor from Kolhapur. Government has expanded the FRP for 2019-20 by Rupees 100 per ton to Rupees 2850 per ton. "The sugar plants from Uttar Pradesh have cane unpaid debts of a few thousand crore rupees, in contrast to their partners in Maharashtra, who have paid near to 99 percent of the cane payment due for 2019-20," commented Autade. 

Severe legal action has been taken by the Maharashtra government such as issue of RRC (revenue recovery certificate) that allows the magistrate of the district to impound the available stock of sugar of the bothered sugar mill and then sell the same in order to clear the cane bill. Severe action was undertaken during the year 2018-19, when the Maharashtra Govt. squashed a record breaking 107 lakh tonnes of sugar. Nonetheless, high ranking representatives of the state government that it was because of the extreme stand on RRC that at any rate 15 sugar plants have been shut down. 

Shekhar Gaikwad, Commissioner (Sugar), Maharashtra said, "We are gazing at one more bountiful season, with the production of sugar expected to be 99 lakh tons. We know about the monetary circumstance of the business and are making a decent attempt to guarantee that the factories run easily. Simultaneously, we are likewise attempting to guarantee that the farmers get their levy on schedule and their cane gets squashed on schedule". 

Sugar factories have now begun marking legitimate agreements with farmers promising to follow through on the cane cost in a couple of installments as opposed to paying full FRP inside 14 days of delivery of cane as specified under the law. In spite marking such agreements with farmers, in localities such as Sangli and Kolhapur, where the Shetkari Sangathana has been wildly effective and can fall back on fierce fights if sugar mills postpone cane payments, sugar factories or mills generally wind up paying the full FRP on schedule.