The Maharashtra Government has decided to seek a bailout package from Union Finance Ministry for paying Fair and Remunerative Prices (FRP) to the sugarcane farmers in the State. The quantum of the package has been not been decided but about Rs 200 subsidy has been sought for every tonne of sugarcane sold by the farmers to the sugar mills.

Indian sugar is not in demand due to excess production in the international market. It has resulted in a build up of huge inventory in the domestic market leading to a slump in wholesale prices. In these market conditions, sugar mills in the State have said that they are unable the FRP of Rs 2,641 per tonne to the farmers.

The FRP is the bare minimum price, which has to be paid by the sugar mills in the state. It is the benchmark price set every year by the Centre. Due to market conditions, only 17 mills so far paid FRP to the farmers.

Cooperation Minister of Maharashtra, Chandrakant Patil told media person on Wednesday that a delegation led by the Chief Minister of Maharashtra will meet Finance Minister Arun Jaitely on January 17, seeking central funds for paying the FRP. A delay in paying the FRP could affect about 3.5 lakh tonnes of sugarcane still standing in the fields, he said.

The price difference between the rate offered by the mills and the FRP, works to about Rs 400. Central funds would be able to chip in about Rs 200 per tonne therefore rest of the money will have to be raised by the sugar mills. Mills will have to pay the FRP because it is a legal obligation. Otherwise action such as sealing the warehouses of the mills will start within a week’s time,” Patil said.

He added that out of 177 functional mills in the State, only 17 mills have managed to pay the FRP. Therefore the Cooperation Department has issued notices against 160 mills.

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