A high-level delegation led by Chief Minister Devendra Fadnavis, comprising ministers and sugar industry leaders, on Wednesday sought the Centre’s intervention to bail out the sugar industry reeling under a heavy financial crisis.
As reported by INAS, CM Fadnavis, along with former ministers Dilip Walse Patil, Harshvardhan Patil and Jayant Patil, made a slew of demands during a meeting with Union Minister of Cooperation Amit Shah.
CM Fadnavis demands the introduction of a special scheme for loan restructuring from Center
The demands included the introduction of a special scheme by the Centre for loan restructuring for the sugar industry, a hike in Minimum Selling Price (MSP), and 100 per cent allocation to the Maharashtra sugar industry for the procurement of 424 crore litres of ethanol annually by the oil marketing companies.
CM during the meeting also demanded that the centre introduce dual pricing for bulk sugar and household sugar consumers, linking the Fair and Remunerative Price (FRP) and MSP. They also demanded the lifting of the ban on sugar exports.
Maharashtra CM urges Center to increase MSP of sugar
While discussing schemes that could impact farmers, the delegation said that the MSP of sugar should be increased from the current Rs 31 per kg to Rs 43 per kg.
They said, “Due to continuous increases in sugarcane harvesting, transport, fuel, chemical, labour, and financial costs, the production cost of sugar in the upcoming season is likely to remain above Rs 43 per kg,” as per IANS.
An increase in the MSP will strengthen sugar mills` financial positions and ensure timely payments to farmers. Given current retail sugar prices, this adjustment is unlikely to have a major impact on the Consumer Price Index. Conversely, it could generate additional Goods and Services Tax (GST) revenue for the government, the delegation said.
The rise in MSP is essential because the sugar industry is currently facing a severe financial crisis. Currently, the MSP for sugar is fixed at Rs 31 per kg, whereas the actual cost of sugar production has risen to approximately Rs 42-43 per kg due to continuous increases in the FRP of sugarcane, wages, energy, transport, fuel, chemicals, and financial expenses.
Sugar Mills continue to incur losses amid low MSP
Highlighting that sugar mills across Maharashtra have been facing losses in the last few years, the delegation said, “In 2018-19, the sugarcane FRP was Rs 2,750 per tonne, which increased to Rs 3,650 per tonne in 2026-27. This means that since the last MSP revision, the FRP has increased by about 29.49 per cent, while the sugar MSP has not been increased so far. This is causing continuous financial pressure on sugar mills.”
Further, in view of continuous fluctuations in crude oil prices and international instability amid current global conditions, the Ethanol Blending Programme has become crucial for national energy security, helping reduce dependence on imported crude oil.
For this purpose, the Government of India had fixed distinct prices for ethanol derived from C-heavy molasses, B-heavy molasses, and sugarcane juice/syrup, with the expectation that ethanol prices would be revised periodically in line with increases in sugarcane FRP, stated the delegation.
Maharashtra Minister`s delegation urges restructuring of all outstanding loans to cooperative sugar mills
Given the current financial situation, it is necessary to restructure all outstanding loans to cooperative sugar mills as of March 31, 2026. Sugar mills should be granted a two-year moratorium period and a repayment period of 10 to 12 years. Additionally, interest subvention should be provided on the lines of SEFASU and previous soft loan schemes to strengthen the financial status of mills and ensure the timely payment of sugarcane arrears, stated the delegation.
(With inputs from IANS)
