In the last leg of the sugarcane crushing season of 2021-22, sugar mills in Maharashtra have started implemting part payment of the basic Fair and Remunerative Price (FRP) for cane procured from farmers. This follows the state government’s decision last month to allow mills to pay FRP in two installments at the current season’s sugar recovery.
Despite strong opposition from farm leaders, the state government had passed a government resolution (GR) in February that allowed mills to pay FRP in two instalments. So, mills would have to pay the first installment, which is calcualted at the basic recovery of 10 per cent within 14 days of cane procurement. The rest would be paid within 15 days of the end of season after calculation of the final sugar recovery, after considering ethanol manufactured from both “C” and “B” heavy molasses.
The basic recovery of 10 per cent commands an FRP of Rs 2,900 per tonne.
The state government says this will allow mills time to raise money for payment. Farmers, the government said, will get payment as per the current sugar recovery instead of last year’s recovery. Sugar recovery is a percentage of sugar produced to cane crushed and is linked to payment of farmers.
Due to opposition to this plan, most farmers had thought it would be implemented from the next season. But mills have started implemeting this payment schedule from this season. Mills across state, barring Kolhapur and Sangli, have recalculated their payment as per 10 per cent recovery and paid their farmers for cane procured.
According to the suagar commissioner’s report, mills had procuded 944.44 lakh tonne of cane till March 15 for which they had to pay farmers Rs 20,326.13 crore (excluding harvesting and transportation costs). But mills have paid Rs 19, 377.36 crore, which has led to arrears of Rs 948.77 crore.
The decision to implement this form of payment where FRP would be calcaulated as per the current season’s recovery and paid in two tranches is not conducive for farmers, said Ankush Chormule, a farmer from Ashta taluka of Sangli district.
Chormule, who grows cane in nine acres, said farmers are worried whether mills would pay the second installment. “Also, there is a lot of opaqueness in the way the final recovery will be calculated,” he said.
Former MP and farmer leader Raju Shetti had dared mills to implement this form of payment. Shetti has moved the Bombay High Court to challenge the GR and said it would come up for hearing next month. “We have strong objection to how the recovery will be calculated. Pune-based Vasatdada Sugar Institute (VSI) will do the calculation but the mill does not have the bandwidth to finish all the calculation of over 195 mills in 15 days,” he said.
Shetti also questioned the selection of VSI to calculate the recovery because most millers have stakes in the institute.