Mumbai: Dilip Walse-Patil, former Finance and Cooperation Minister of Maharashtra, has urged both the state government and the Centre to take immediate steps to support the state’s cooperative sugar industry, warning that the sector is facing a serious financial crisis, Lokmat Times reported.
Speaking during the budget discussion in the Maharashtra Legislative Assembly on Tuesday, the Nationalist Congress Party (NCP) legislator said unfavourable weather conditions have led to a 15% decline in sugarcane production in the state this year. As a result, the crushing season ended in less than 100 days.
According to him, the early closure of mills has resulted in an estimated loss of around Rs 3,300 crore for the industry. At the same time, about Rs 4,315 crore in Fair and Remunerative Price (FRP) payments to farmers are still pending.
Walse-Patil said that without a revival package from the government, the cooperative sugar sector, which plays a key role in the rural economy of the state, could face collapse within the next two years.
He pointed out that the sugar industry contributes significantly to government revenues through taxes such as GST, cess and electricity duty, generating nearly Rs 8,000 crore annually for the Centre and the state. The sector’s annual turnover is estimated to be between Rs 50,000 crore and Rs 60,000 crore.
The former minister also said mills are incurring losses because the Minimum Selling Price (MSP) of sugar is lower than the actual cost of production. In addition, recent restrictions on ethanol production have reduced an important source of income for factories.
Walse-Patil demanded an immediate increase in the MSP of sugar, renewed incentives for ethanol production and a higher sugar export quota from the Centre.
He also referred to the soft loan scheme introduced during the 2002–03 sugar season to help mills clear cane arrears and suggested that a similar system should be adopted again to raise funds and ensure timely payments to farmers.
