Sugar industry experts and farmers’ organizations are divided on their interpretation of the Maharashtra government’s order on Fair and Remunerative Price (FRP) to sugarcane farmers issued on Monday.
The State government issued a resolution applicable for the current and future sugarcane crushing seasons stating that the sugar mills must consider the recovery of the ongoing sugar season while finalizing the FRP.
As per the current practice, FRP paid in the ongoing season is based on the recovery rate achieved by mills in the last season. Last season’s recovery rate is considered because at the beginning of the sugar season, mills have no clear idea about the sugar recovery they might get after crushing the cane during the ongoing season.
However, the government has now finalized recovery rates of a minimum 10 per cent for the Pune and Nashik regions and 9.50 per cent for the Aurangabad, Amravati and Nagpur regions. The recovery rates will be the base for the payment of “initial minimum FRP” for the sugarcane crushed.
After the crushing season ends the mills must finalize “the final instalment of the FRP” within 15 days based on the final recovery rate in the current sugar season and pay the “difference” to farmers.
The final FRP will be calculated based on the final recovery, reduction in the recovery rate because of use and sale of sugar syrup, juice and B heavy molasses.
Why this decision?
Sugar (control) Order 1966 makes a provision of FRP and the union government used to issue a notification on the FRP for the season at the beginning of every sugar season.
By its 2020 notification, the Union Government authorized States to announce the FRP. In 2021, the Maharashtra government appointed a committee to study the FRP policy. Based on the committee’s recommendation and suggestions given by the Sugar Control Board, the State government decided on the new FRP policy.
Industry and farmers split
B B Thombare, President of West Indian Sugar Mills Association (WISMA), told Businessline that the new order by the Maharashtra government is not about splitting FRP into two instalments. “The FRP will be paid in one instalment as it is being paid now. But the premium will be paid only after the end of the sugar season based on the final recovery,” he said.
Former MP and Swabhimani Shetkari Sanghatana leader Raju Shetti said the State government and, especially, Sharad Pawar’s Nationalist Congress Party (NCP) are playing with the words.
“ From where this idea of premium has arrived? And who had demanded this new system?” wondered Shetti.
“The government must continue the current FRP system and pay FRP in one instalment. In the name of premium, the sugar mill owners want to use farmers’ money for eight-nine months and we will not allow this to happen,” he said.