Maharashtra mulls new sugarcane Act

A separate panel comprising members of cane growers, factories to fix cane price

The Maharashtra government  has proposed to bring in a new law for the purchase and supply of sugarcane in the state.

The proposed Act would be on the lines of the  Karnataka Sugarcane (Regulation of Purchase and Supply) Act, 2013. The decision in this regard was taken on Wednesday at a meeting between the state government and representatives of cooperative sugar factories.

The Karnataka government has proposed the establishment of a Sugarcane Control Board comprising ministers, bureaucrats, sugarcane growers and factory owners.

Maharashtra, however, has suggested such a board should be headed by a retired judge and representatives of cane growers and factories and should not have ministers, as it might lead to conflict of interest.

According to the new law, it would be binding on the sugar factory to pay cane price within 14 days to the growers and the payment would be made on the basis of the recorded weight of the cane at the factory. The Karnataka Act envisages rigorous imprisonment for one year or a fine if any person contravenes any provision. Similar provisions can be made in the proposed Maharashtra's legislation.

A senior minister, who did not want to be identified, told Business Standard, “So far, two of the total 10 recommendations made by the Rangarajan Panel on sugar decontrol have been accepted. These include the removal of the sugar levy obligation and 70 per cent of the revenue earned by the individual sugar factory (producing only sugar) being distributed among sugarcane growers. Besides, 75 per cent of revenue would be shared by the individual factory producing both, sugar and by products, with cane growers. The Karnataka Act envisages regulation of the purchase and supply of sugarcane required for use in sugar factories in Karnataka. On similar lines, a new legislation would be tabled in the legislature.”

The minister said currently, sugarcane price in Maharashtra is decided by the ministers’ committee, which has no legal or statutory base. The minister said the government asks sugar factories to pay as per the fair and remunerative price fixed by the Centre.

"Until Centre came out with the fair and remunerative price formula, cooperative factories were paying statutory minimum price fixed by the state. However, in view of agitation launched by various farmers organizations sugar factories started providing higher than the statutory minimum price and now fair and remunerative price. This has turned balance sheet of a large number of cooperative factories red and their net worth became negative," the minister added. According to the minister, if the factory pays more than fair and remunerative price it attracts income tax.

Former cooperation minister Shankarrao Kolhe said the new legislation is a need of the hour to avoid confrontation between the various organizations of cane growers and sugar factories.

With the new act, the representatives of cane growers will be party to the decision on price for the procurement and supply. Factories want the state government to table the legislation in the ongoing monsoon session of the state legislature. This will come quite handy to avoid agitation ahead of next curshing season begins on November 1," he noted.