Maharashtra sugar mills, loan waiver, sugar industry, Nabard, Sharad Pawar, MSC, Uttar Pradesh

Last season, the Maharashtra State Cooperative Bank (MSC) had given a bridge loan at the rate of 14% to factories.

Maharashtra’s sugar industry on Thursday submitted a list of proposals before the state government seeking a bailout package for the sector and a 2-year moratorium on loans, including a 12-15 year repayment period, said top officials of the Maharashtra State Cooperative Sugar Factories Federation.
“The federation placed its submissions before the government on several issues including the bailout package, restructuring of loans, sugarcane harvesters, transportation subsidy, incentives on logistics to reach out to markets outside Maharashtra, difficulties in making Fair and Remunerative Price payments to farmers,” said Sanjay Khatal, MD of the federation.

The federation was given a very patient hearing but no commitment was given, he added. The meeting was presided by deputy chief minister Ajit Pawar with Nationalist Congress Party leader Sharad Pawar, chairman of National Bank for Agriculture and Rural Development (Nabard), chairman of the board of administrators of MSC Bank and other top officials of the sector in attendance.

Maharashtra contributes 30% to the national sugar production. However, due to the extended monsoon and drought in some parts of the state, sugar production is expected to be 56-57 lakh tonne in 2019-20 as against 107 lakh tonne in 2018-19. Until now, some 136 mills comprising 71 cooperatives and 63 private mills are operational while applications of 31 mills have been pending for clearance with the State Sugar Commissioner.

Last season, the Maharashtra State Cooperative Bank (MSC) had given a bridge loan at the rate of 14% to factories. A similar loan would be useful for this season as well, he maintained. He felt that the sugar industry in the state would be crippled unless issues are addressed on a priority basis. Khatal said the government needs to ask the Maharashtra State Cooperative Bank to provide a short-term loan to release export sugar which will help mills to reduce their inventories.

To compete with mills from Uttar Pradesh, the government needs to provide transport grant of Rs 250 per quintal so that mills can sell in UP and other states in north India, he said, adding that sugar mills have cleared 99% of FRP for the 2018-19 crushing season. However, mills have to pay wages to workers and clear bills of sundry contractors.