Maharashtra government approves soft loan for sugar mills to ensure cane growers get FRP

The state government has decided to extend financial help to sugarcane farmers. It has approved the decision of raising soft loan of almost Rs2,000 crore to give the fair and remunerative price (FRP) to cane growers.

In the 2014-15 fiscal, sugarcane was planted on 10.54 lakh hectares of land in Maharashtra. Currently, 178 sugar mills are functioning in state — 99 are co-operative, while 79 private. Together, they had crushed 929.54 lakh metric tons of cane and produced 104.83 lakh metric tons sugar.

"To help the farmers, the central government has approved soft loan of Rs24,000 per metric ton of sugar," said a senior government official.

The 178 mills are eligible for the soft loan. As per the notification issued by the government, they don't need to pay the 10% interest for the first year of the five-year loan. "Government has decided to give this amount as a subsidy to farmers. If the sugar mills fail to pay the rate to farmers, then the given soft loan amount will be cancelled and action will be taken against the errant mills," stated the notification.

It further read that if a sugar mill is declared as a non-performing asset, then its board of directors has to give individual or collective assurance in writing that the agreed amount will be paid to the farmers in due course of time.

"Banks should ensure that the amount is given to farmers only. Banks need to play a crucial role. Otherwise, it happens that the money is taken from the government but never reaches the farmers. We hope that all sugar mills will implement this decision in the larger interest of the farmer community," said a senior government official from the co-operative and marketing department.

NCP leader Jayant Patil, however, slammed this decision and said the state government is not serious about the farmer issue. "Most sugar mills are facing financial difficulties. If they do not have money, how will they be able to give FRP? The given loan amount is not sufficient. Government should instead give a relief package to farmers. Soft loan is not going to help anybody, neither the mills nor the farmers," he added.