Mumbai: The Bombay High Court has quashed the Government Resolution (GR) issued by the State issued on February 21, 2022, that provided payment of Fair and Remunerative Price (FRP) to sugarcane farmers in two instalments, terming it as “illegal and invalid.”
A bench of Justices Girish Kulkarni and Advait Sethna emphasised that while benefits are granted to the sugar factories, “the agriculturists / farmers can never be neglected nor can their rights be suppressed and or they could be financially exploited”.
Holding that the GR was “bad and illegal”, the HC paved a way for a one-time payment noting that farmers are entitled to FRP for sugarcane supplied by them to sugar factories at the beginning of the crushing season.
FRP is a price declared by the government which the sugar factories are bound to pay to farmers for the sugarcane procured from them. In 2009, the Centre introduced the FRP system to ensure farmers get an adequate minimum price.
The court was hearing petitions by former MP Raju Shetti of Swabhimani Shetkari Sanghatana representing sugarcane-growing farmers, along with some sugar mills aggrieved by the decision. Shetti’s plea claimed that the GR was contrary to the Sugarcane (Control) Order (SCO) and sugarcane pricing policy, and it would adversely impact farmers as they would receive much lesser amounts.
The GR was issued by the Maha Vikas Aghadi (MVA) government in February 2022 allowing FRP to be paid in two instalments. The first tranche was to be paid within 14 days of purchasing sugarcane and the second one was to be paid within 15 days of the closure of sugar season, after the final sugar recovery was calculated.
During the hearing in February, the HC was informed about minutes of the meeting held on November 29, 2022, by then chief minister Eknath Shinde and DCM Devendra Fadnavis and other officials, wherein it was decided to withdraw the decision of FRP being paid in instalments, and to pay the amount through single instalment.
The judges, however, expressed displeasure over non-implementation of the decision.
State Advocate General Birendra Saraf submitted that the GR enabled that a higher price can be fixed for the benefit of farmers. He argued the Centre had fixed the minimum FRP and the state government could decide the final FRP, at the end of the crushing season, and said GR balanced the interest of farmers and sugar factories and other stakeholders.
However, the court observed that the GR consisted of a “regime which was wholly alien” to provisions to determine the FRP. The bench said GR violated provisions of the Maharashtra Regulation of Sugarcane Price (Supplied to Factories) Act, 2013, which provided for payment as soon as sugarcane was supplied to the factories.
“The conditions as imposed by the impugned GR are certainly destructive of the orders to be passed by the Central Government… fixing the FRP which is to apply at the beginning of the season,” the court stated.
The court further clarified that while farmers can enter into agreements with sugar factories for alternative payment terms, the default must be the Central Government’s FRP within 14 days.
“There cannot be a situation that the farmers become debt ridden, as it is only on the receipt of the fair price for the sugarcane as supplied by them, depends their further activities, for the next crushing season,” the court observed, underscoring the importance of timely payments for farmers’ economic stability.
The bench said that in a country having a vast population depending on agriculture and related activities “it cannot be oblivious to the more humane, realistic and natural consequences of any activity of the farmers,” who play a “pivotal role” in supporting food requirements of more than 140 crore people.
“Any dilution of mandate (to provide immediate payment of FRP within 14 days of supply) would be fatal and would adversely affect the very livelihood of the agriculturists and the farmers,” the bench said, adding they cannot become debt-ridden, as their future depends on receipt of FRP. The HC rejected State’s request to stay the order citing the “serious repercussions on the agriculturist / farmers.”
