HC strikes down GR reducing sugarcane FRP, deferring payments to farmers

The GR issued by the cooperation, marketing and textiles department on February 21, 2022 was violative of the Sugar (Control) Order (SCO), 1966 promulgated by the central government, the court said

MUMBAI: The Bombay high court on Monday struck down a February 2022 government resolution (GR) which reduced the fair and remunerative price (FRP) for sugarcane in Maharashtra below the rate fixed by the central government and made farmers wait till the end of the crushing season to receive payments from sugar factories.

According to the GR, FRP for sugarcane was to be finalised based on sugar recovery during the season, after deducting average harvesting and transportation costs (Hindustan Times)

The GR issued by the cooperation, marketing and textiles department on February 21, 2022 was violative of the Sugar (Control) Order (SCO), 1966 promulgated by the central government which provides for payment to farmers within 14 days of supply of sugarcane to factories and imposes a 15% per annum interest in case of delays, the division bench of justices GS Kulkarni and Advait Sethna said while striking down the GR.

According to the GR, onwards from the crushing season of 2021-22, FRP for sugarcane was to be finalised based on sugar recovery during the season, after deducting average harvesting and transportation costs.

Devappa Anna aka Raju Shetty, a farmers’ leader from western Maharashtra, had approached high court, challenging validity of the GR, contending that it was contrary to not only the SCO but also the Maharashtra Regulation of Sugarcane Price (Supplied to Factories) Act, 2013.

Shetty submitted that that the SCO, a statutory order issued by the central government under the Essential Commodities Act, prohibited sale or purchase of sugarcane below the FRP fixed by the centre, and both the SCO and the 2013 state law mandated sugar factories to pay farmers within 14 days of supply of sugarcane.

Shetty argued that the GR was adversely impacting sugarcane farmers in Maharashtra as they were receiving a much lesser price than the FRP fixed by the centre and had to wait till end of the crushing season to receive payments.

The court accepted Shetty’s arguments and said the conditions imposed by the GR established “a parallel procedure” for determination of FRP, which was “certainly destructive” of the orders passed by central government and “cannot be held to be legal and valid.”

The division bench declared that farmers are entitled to receive the FRP fixed at the beginning of the season, as determined by the central government under the SCO, within 14 days of supply of sugar cane to factories.