Maharashtra's sugar mill owners want to spin it off as sweet news. But the sugarcane farmers whom they are targeting are far from happy.
Cash-strapped and needing to clear Rs 4800 crore in dues, the owners have offered a unique remuneration - 80% in cash and the rest in sugar. According to a report published in the Indian Express, this means that for every tonne of cane supplied to the mills, the farmers will get 17 kg of sugar as payment.
Until January 31, Maharashtra mills had purchased cane worth Rs 13,306.56 crore at the average fair and remunerative price (FRP) of Rs 2,450 per tonne for the state. The total payment received by farmers, however, has been just Rs 8,464.47 crore, which translates into arrears of Rs 4,842.09 crore pending since October 2018.
The majority of sugar mills in Maharashtra are owned by the political class. The state government had recently given orders to seize sugar from 39 public and private sugar mills who have consistently been delaying the payment of their dues to farmers. In the current season, out of the total 185 public and private mills, only 11 have paid the farmers their complete dues.
The government's action came after former NDA ally and head of Swabhiman Shetkari Sanghatana Raju Shetti organised a protest.
Mills in Maharashtra normally pay growers the FRP as the first instalment within 14 days of taking delivery of cane. In most years, they also pay two more instalments. One, after the end of crushing operations by around April. And then, close to Diwali before the start of the next season, depending on profits from the sale of byproducts such as molasses/alcohol and bagasse/co-generated power.