Sugar mills in Maharashtra have paid sugarcane farmers 86% Fair and Remunerative Price (FRP). Out of the 187 mills that have started crushing the cane season, 74 sugar mills paid 100% of FRP.
As per the data released by the State Sugar Commissioner, by the end of February, the mills had to pay a price of Rs 16,275 crore to farmers, of which Rs 13,917 crore had been paid. FRP arrears are Rs 2,367 crore. There are 39 mills in the State that have paid less than 60% of the FRP payments.
The FRP is based on the cost of producing sugar cane and an element of guaranteed profit to cover the risk of sugar cane farmers.
According to the Indian Sugar Mill Association (ISMA), the mark up above the cost of producing sugar cane at an all-India average is as high as 100% above the cost of producing sugar cane.
The Sugar Commissioner has not notified any sugar mills of the Revenue Recovery Certificate (RRC). The Sugarcane (Control) Order, 1966, mandated payment by farmers of the price of cane within 14 days of delivery.
If the mills fail to make payment within the time allowed, they will have to pay 15 per cent of the annual interest on the fees due.