FRP payable only on sugar recovery for particular season: Centre to Maha mills
The ministry of consumer affairs, food and public distribution released a circular on July 10, clarifying the FRP calculation for sugar cane. It was in response to a query from the Maharashtra State Cooperative Sugar Factories Federation Limited, which had written to the ministry on July 3.
The sugar recovery rate measures the amount of sugar extracted from a tonne of sugar cane. Centre sets the FRP for each sugar season based on the commission for agriculture costs and prices (CACP) recommendations.
Typically, FRP is announced for a base recovery rate of 10.25%, with incremental payments for higher recovery rates. However, sugar millers had been paying FRP based on the previous year's recovery rate, rather than the actual rate for the current season.
Sanjay Khatal, MD of the Maharashtra State Cooperative Sugar Factories Federation Limited, said it was a historical mistake that was rectified now for the benefit of the sector.
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"We had sought a clarification on whether to calculate FRP based on the sugar recovery rate for the previous year or the ongoing season, and Centre has provided its clarification. Now, the mills will have to pay the base FRP, which is calculated as per the average FRP of a particular region," he said.
Khatal said, "The sugar recovery rate at the end of the season should, however, be the basis for further payment if applicable.
The over and above FRP amount will be paid as a premium to the farmers at the end of the season."
According to Khatal, sugar millers do pay the FRP based on the base recovery rate, but for higher recovery rates, they can pay the additional amount in one or two installments, rather than upfront.
Vijay Autade, sugar industry expert, said the Centre's circular would add to the confusion with no clarity on how FRP would be paid before the end of the season, considering the sugar recovery rate for that specific season.
"It is okay to pay FRP based on sugar recovery rate for the current season, but the mechanism is not clear. There is implied meaning that the farmers will get the price for the sugar cane in multiple installments," he said.
Farmers' leader Raju Shetti alleged that govt was working in the interest of the millers. "Farmers grow sugar cane for over a year and wait for months for the sugar cane season to end to get the money."
Mills owe Rs 138cr to farmers in FRP dues
Twenty-eight sugar mills, most of which are from Solapur district, have owe Rs 138 crore in FRP dues to farmers for the 2024-25 sugar cane crushing season, which ended two months ago, data accessed from the sugar commissioner's office showed on Tuesday.
The sugar commissioner's office has issued notices to recover FRP dues from the mills. As many as 200 sugar mills from Maharashtra crushed 854 lakh tonnes of sugar cane during the season, during which the mills paid Rs 24,424 crore to the farmers in FRP.
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