Maharashtra to form sugar cane control board

To be chaired by state chief secretary and not by any minister

A week after farmers’ organisations suspended their violent agitation, the Maharashtra Cabinet on Wednesday approved a proposal to set up a sugar cane control board. The proposed board, to be headed by the chief secretary and not by the revenue minister, will comprise secretaries from various ministries. The state sugar commissioner will be its member-secretary.

The proposed board will be set up through the Maharashtra Sugar (Purchase & Supply) Bill 2013, which is expected to be tabled in the coming winter session of the state legislature beginning on Monday in Nagpur.

Maharashtra has 202 registered co-operative sugar factories and over 65 private factories. The state contributes 35.3 per cent of the national sugar output followed by Uttar Pradesh (23.7 per cent). Among Indian states, Maharashtra tops in sugar production as well as recovery of sugar. The industry clocks an annual turnover of Rs 30,000 crore.

A senior official told Business Standard: “The enactment of law will be done under the provisions of Sugar cane Control Order. The cane price will be fixed on the 70:30 formula as suggested by the Rangarajan Committee. As per this formula, a sugar unit without any by-products business will have to pay cane price of 70 per cent of its revenue realisation, while it will have to spend 30 per cent on its functioning. On the other hand, a sugar factory with by-products business will have to pay cane price of 75 per cent of its revenue realisation. The board will fix the cane price after taking into account this formula.”

The official added the board will function on the lines of the state electricity regulatory commission. The board will meet thrice a year.

According to the official, it would be mandatory for the sugar factories to pay the fair and remunerative price and, in addition to this, the cane price fixed by the board. Failing which, the sugar factories will be entitled to pay fine of Rs 25,000.

Former minister Babanrao Pachpute, who is the promoter of a private sugar factory in the sugarcane-rich Ahmednagar district, welcomed the state Cabinet's decision. ''The board should have been formed two years ago. The Rangarajan Committee formula needs to be changed to 65:35 wherein a sugar factory will pay cane price of 65 per cent of its revenue realisation while it spends 35 per cent on its operations,'' he noted.

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.

A senior minister, who did not want to be named, hoped the establishment of the board will stop farmers’ agitation, which has become an annual feature in the state. ''Due to the delay in the commissioning of crushing, sugar recovery and production may reduce during the current season. Farmers have agreed to cane payment at Rs 2,650 per tonne in two instalments, comprising the first instalment at Rs 2,200 a tonne and the second at Rs 450 a tonne after two to three months.”