In a move aimed at bringing greater alignment between farm payouts and mill economics, sugar mills across Maharashtra have agreed to calculate Fair and Remunerative Price (FRP) payments based on recovery achieved during the same crushing season. The decision follows a high-level meeting between Deputy Chief Minister Ajit Pawar and senior representatives of the state’s sugar industry.

Millers stressed that pegging FRP solely to cane weight, without factoring in actual recovery, creates a mismatch between revenue realization and farmer payments — a challenge compounded by volatile recovery percentages across months. Industry leaders also flagged the rising cost burden and liquidity constraints that delay FRP payouts, noting that mills can raise working capital only by pledging sugar stock and are further restricted by government-mandated release quotas.

The industry is now intensifying its demand for an upward revision of the Minimum Selling Price (MSP) of sugar, warning that without an MSP increase in line with FRP, a majority of mills risk financial distress and potential shutdowns. A higher MSP, millers argue, would immediately boost the collateral value of sugar stock, unlock higher bank financing, and ease payment delays to farmers — stabilizing both industry operations and farmer incomes.

The Maharashtra State Co-operative Sugar Factories Federation Limited has urged policymakers to act swiftly, framing the MSP revision as critical not only for mill viability but also for the state’s broader rural economy.