Pune: Sugar mills in Maharashtra have decided that Fair and Remunerative Price (FRP) payments to cane farmers will now be calculated on the basis of recovery achieved in a particular crushing season. The decision followed a meeting between Deputy Chief Minister Ajit Pawar and representatives of the sugar industry.
During the meeting, millers highlighted the challenges they face in paying FRP strictly on the basis of cane extract, pointing out that recovery percentages fluctuate from month to month. They also cited difficulties in making timely payments, noting that their costs are rising and that they can raise loans only by pledging sugar stock. Moreover, they are required to release sugar in the market according to government-fixed quotas, which restricts their financial flexibility.
Sugar mills are also pressing for an increase in the Minimum Selling Price (MSP) of sugar. The Maharashtra State Co-operative Sugar Factories Federation Limited has warned that without an upward revision of MSP in line with FRP, most mills in the state are facing closure.
Industry representatives argue that a higher MSP would boost the value of sugar stock, enabling mills to secure larger loans from banks. This, they say, would ease liquidity pressure and help them make cane payments to farmers more efficiently.
