Maharashtra Extends Soft Loan Scheme for Sugar Factories
The Maharashtra government has amended its soft loan scheme to support cooperative sugar factories and farmers ahead of the crushing season.
The soft loan scheme has been extended by one month to November 30, 2026.
A fund of Rs 738.51 crore has been approved to subsidize interest on loans.
Cooperative sugar factories can now use loans for various purposes, not just for paying outstanding FRP.
In a significant move to support the sugar industry, the Maharashtra government has announced an extension of its soft loan scheme for cooperative sugar factories. This decision, made public on September 15, aims to assist sugarcane farmers by ensuring the payment of the Fair and Remunerative Price (FRP) dues and providing necessary funds for the upcoming crushing season. The extension of the scheme until November 30, 2026, comes as a relief to many factories struggling with financial challenges.
The introduction of this soft loan scheme was prompted by the pressing need to address the outstanding FRP amounts owed to farmers. Last year's crushing season saw 102 cooperative sugar factories process a total of 527.51 lakh metric tonnes of sugarcane. However, many factories faced financial difficulties and were unable to settle their FRP dues, leading to the government's intervention.
Under the revised scheme, the government will cover the interest subsidy on loans taken by sugar factories, with a substantial fund of Rs 738.51 crore allocated for this purpose. Initially, the scheme required that loans approved and disbursed by banks by October 31, 2026, would qualify for the interest subsidy. However, due to delays in the announcement, the government has agreed to extend this deadline, allowing factories more time to secure the necessary funding.
Moreover, the government has relaxed the stipulation that loans must solely be used for paying outstanding FRP amounts. Factories that do not have outstanding FRP dues will now be permitted to utilize these funds for other operational needs. Additionally, factories can access these loans from the National Cooperative Development Fund (NCDC) alongside traditional banking institutions, broadening their financial avenues.
Looking ahead, the extension of the soft loan scheme is expected to provide much-needed financial relief to cooperative sugar factories and sugarcane farmers alike. As the crushing season approaches, stakeholders are hopeful that these measures will stabilize the industry and ensure timely payments to farmers, thereby promoting a healthier agricultural economy in Maharashtra.
