Rs 738.51-Crore Interest Subsidy Approved For Cooperative Sugar Mills

Mumbai: The Maharashtra Cabinet on Tuesday approved a soft loan scheme for cooperative sugar mills, with an estimated interest subsidy of Rs 738.51 crore to help them clear pending Fair and Remunerative Price (FRP) dues to sugarcane farmers for the 2025-26 season and prepare for the 2026-27 crushing season.

The decision, taken at a Cabinet meeting chaired by Chief Minister Devendra Fadnavis at Mantralaya, comes ahead of the commencement of the state’s sugarcane crushing season, scheduled to begin on October 15. The move is expected to provide relief to both sugarcane growers and cooperative mills in Maharashtra, India's largest sugar-producing State.

Under the scheme, cooperative sugar mills will be eligible for an interest subsidy on loans sanctioned and disbursed by banks up to October 31. The repayment period will be seven years from October 1, and the State government will bear the interest for the same period.

According to officials, the loan amount will primarily be used to clear pending FRP dues to sugarcane growers. Cooperative mills with no outstanding FRP dues will have to use the funds to make preparations for the 2026-27 crushing season.

The government has also imposed conditions on the beneficiaries. Mills that fail to repay their instalments on time will not be eligible for the interest subsidy in the subsequent year. They will also be required to submit proof of utilisation of the loan funds by July 2027.

Maharashtra had 102 cooperative sugar mills that crushed around 527.51 lakh metric tonnes of sugarcane during the 2025-26 season. Financial difficulties faced by several cooperative mills had led to demands for government assistance to meet interest payments on loans and clear pending FRP dues.

Maharashtra had introduced similar interest subsidy measures for loans taken by sugar mills in 2015 and 2019. In 2015, the State had also participated in a scheme introduced by the Centre to provide financial assistance to sugar mills.

Mr. Fadnavis said cooperative sugar mills needed to operate swiftly as they were facing financial difficulties. “The State government has approved a soft loan policy of around Rs 738.51 crore for cooperative sugar mills. As per this policy, the mills will get loans easily. The government will pay the interest on the loans. With this decision, the mills can take sugarcane from the farmers,” he said.

Mr. Fadnavis also said the State government was closely monitoring the rainfall situation and would take measures to address the concerns of farmers.

Acknowledging that the rainfall situation in the State was not satisfactory, he said several districts had not received rain for nearly 30 days. “The State government is closely monitoring the situation. Even today, we discussed this issue in the Cabinet meeting for around 45 minutes. Each district has given a presentation about the rainfall situation. We are going to take measures to tackle the drought-like situation,” he said.

According to a presentation made by the Agriculture Department before the Cabinet, the Nagpur, Amravati, Marathwada, Nashik and Pune divisions had received less than 74 per cent of their average rainfall. Fourteen of the State's 36 districts had received less than 75 per cent of their average rainfall.