Sugar factories will not be allowed to crush sugarcane this season, unless they pay farmers the entire fair and remunerative price (FRP), the Maharashtra government announced on Thursday.
The season in Maharashtra – the second largest producer of sugar in the country – starts on October 15.
The FRP is an amount factories pay to farmers to compensate them for the cost of growing sugarcane, plus a fair margin. For the 2014-15 season, 156 of the 173 sugar factories — private and cooperative — have not paid their entire dues to farmers.
Nine of these factories owe more than 60% of their dues, and are likely to face action, including seizure of property.
The dues the other 147 factories owe range between 10% and 30%. They have been given a month to submit a guarantee that they will pay up.
This decision was taken during a meeting, chaired by CM Devendra Fadnavis, of senior ministers like Dilip Walse Patil, Harshawardhan Patil, opposition leader in the Assembly, Radhakrishna Vikhe Patil and Ajit Pawar, all of whom, incidentally, are sugar barons.
“These factories have taken the benefit of the soft loan the Centre offered them in June, with additional benefits from the state announced in July. The soft loan is offered in proportion to their dues. Within a month, we have asked them to submit a guarantee on stamp paper saying they will pay the dues,” said Chandrakant Patil, co-operatives minister.
Patil said the factories are waiting for these loans to get sanctioned to make their payments to farmers.
Sources in the government said even those factories that were in a position to pay off their dues chose to wait for the soft loan.
So far, soft loans worth Rs 1,000 crore has been sanctioned for these factories.
“Currently, around Rs 2,600 crore is due to farmers. Not crushing cane is not in the interests of anyone,” Patil added.
More than three-fourths of the 147 factories that are yet to pay dues are controlled by politicians, including BJP’s Pankaja Munde, former CM Ashok Chavan and former deputy CM Ajit Pawar, among others, according to data compiled till July-end this year.
The dues of these factories stood at Rs 3,599 crore.
All of the state’s co-operative sugar factories and nearly 50% of the private ones are controlled by politicians.
Fadnavis also announced an FRP of Rs 2,736 per metric tonne of sugarcane for farmers this year.
This would include transport and cane-cutting cost of Rs 550.