Maharashtra Cooperation minister Chandrakant Patil says the central govt will soon provide a package of Rs. 1,950 crore for the beleaguered cooperative sugar mills in the state, reports Economic Times.
If the sugar mills do not pay remunerative price to farmers even after receiving financial aid from the Centre, the state government will take legal action against such mills, minister said.
Sources say the market rate of sugar has declined and it is very difficult for sugar mills to pay fair and remunerative prices.
Even as sugar mills in Maharashtra find themselves hard-pressed to make FRP payments to farmers, Maharashtra State Cooperative Bank (MSCB) has lowered valuations on sugar pledged by mills yet again, reports Financial Express.
Valuations now stand at Rs 1,950 per quintal, leaving R910 for cane payments and R1,660 as the pledge amount. Valuations stood at Rs 2,100 per quintal till June 6.
A source is quoted saying since the start of the season in October 2014, this is the ninth time that MSCB has lowered valuations for mills in the state. This is a clear indication of the volatility of the market, source says.
Millers have been given time till July 15 to make up for the short margins. They could make up for this through the sale of sugar. Around 32 mills find themselves facing short margins and have to recoup their balance sheets before July 15, a source close to the bank said.
Sanjeev Babar, MD, Maharashtra State Cooperative Sugar Factories Federation ( MSCSFF) says scores of mills do not have the funds to pay farmers and they would not be able to crush cane this year.