The Maharashtra cabinet approved soft loans for cooperative sugar mills on Tuesday, money the government says will clear Fair and Remunerative Price arrears owed to cane growers from the 2025-26 crushing season and carry mills into 2026-27. Chief Minister Devendra Fadnavis chaired the meeting. PTI’s account of the decision carried no figure; the state broadcaster’s Akashvani bulletin put the package at about Rs 750 crore.
The arrears this is meant to clear have almost all been paid
Sugar Commissionerate data complicates the framing. By 31 July 2026, mills had paid Rs 40,190 crore of the Rs 40,446 crore of FRP payable for 2025-26, or 99.37%, according to figures reported by the trade publication ChiniMandi. Of 210 factories that crushed cane that season, 171 had settled in full. What remained was Rs 256 crore spread across 39 mills, and only three of those had paid under 60% of what they owed their growers.
Rs 256 crore against a Rs 40,446 crore bill works out to six-tenths of one percent. The state also already had teeth for it. The Commissionerate had served notices on 81 mills and opened Revenue Recovery Certificate proceedings against ten, which allow the collector to attach property rather than send another reminder.
So the cane-payment framing does not carry the weight of the number. If Rs 750 crore is right, the package is roughly three times the entire outstanding FRP. Most of it is working capital for a crushing season that starts in a few weeks.
What the cabinet cleared is smaller than what was floated
At a review meeting on 3 September, Deputy Chief Minister Sunetra Pawar described a soft loan corpus of around Rs 2,000 crore, repayable over seven years and routed through district central cooperative banks and the Maharashtra State Cooperative Bank, with the state absorbing about Rs 100 crore a year in interest. Eligibility was to turn on crushing capacity and a mill’s financial health, The Hans India reported. Whether Tuesday’s approval is a first tranche of that corpus or a trimmed version of it has not been spelt out in public.
The second half of that September announcement matters more and has not reached the cabinet. Pawar also promised a by-products policy covering co-generation, first and second generation ethanol, compressed bio-gas, green hydrogen and sustainable aviation fuel. Mills that earn from power and fuel alongside sugar are the ones that pay cane bills on time without a state loan. That policy is still a promise.
What it changes on the ground
For growers attached to the 39 mills still short, the loan raises the odds of a cheque before the new season swallows everyone’s attention. For the far larger group whose mills already paid, the effect is indirect but real: mills that open on schedule hire harvesting and transport labour on schedule, and cane standing in the field gets lifted before it loses sucrose.
There is a cost worth naming. Interest the state pays on these loans is public money going to cooperative mills whose boards are, in much of western Maharashtra and Marathwada, run by serving and former politicians. The same review meeting noted that sugarcane takes up about 4% of the state’s cultivated land while drinking 60-70% of its irrigation water. Every rupee that keeps a marginal mill crushing is a rupee that argues against the crop diversification the state says it wants.
What to watch
- The government resolution, which should name the qualifying mills, the interest subvention and the repayment schedule. Until it appears, the Rs 750 crore figure rests on one bulletin.
- Whether recovery proceedings against the ten defaulting factories continue once loan money reaches them, or lapse without notice.
- Whether the by-products policy reaches the cabinet before the 2026-27 crushing season opens.
Sources: ThePrint/PTI, Akashvani News, ChiniMandi, The Hans India
This report was written with AI assistance from the publicly reported sources linked here; each fact was cross-checked against at least two of them.