In a significant move, which aims to provide a much needed relief to the sugar factories, the Maharashtra government has allowed payment of ‘Premium’ for additional sugar recovery on the basis of the final recovery of the operational crushing season. The earlier existing practice was to pay the same based on the final recovery of the last/previous crushing season. The new policy will put a brake on the problems and pave the way for a streamlined and smooth flow of payment to all farmers throughout the crushing season.
Fair and Remunerative Price (FRP) and Premium are two different components. The State Government has not permitted any split of the FRP fundamentally payable between recovery of 9.5% to 10%. FRP shall continue to be paid in a single installment within 14 days as per Sugarcane Control Order 1966. However, the ‘Premium’ which is a separate and independent component by way of an additional price is to be paid based on additional recovery over and above 10%.
The Maharashtra Rajya Sahakari Sakhar Karkhana Sangh, which is a representative body of cooperative sugar factories in the state, said the Government of India had declared the FRP (Rs 290/- per quintal for sugar season 2021-22) for the standard benchmark recovery of 10%. For every 0.1 % decrease in recovery, for those factories whose recovery is below 10% but above 9.5% the FRP is reduced by Rs. 2.90 per quintal. Therefore, effectively FRP at 9.5% and below is fixed at Rs 275.50 per quintal. However, for additional recovery above 10% the government has prescribed a payment of ‘Premium’ over and above the FRP which is to be paid at Rs 2.90 per quintal for every 0.1% point increase above 10%.
‘’The FRP always tends to get paid for the operational crushing season as may be declared by the Central Government. However, the ‘Premium’ was getting paid for the last/previous season which was a big anomaly. This premium will now have to be paid as per the final recovery of the operational crushing season itself,’’ said the Sangh in a statement.