Maharashtra approves soft loan scheme for sugar mills, Pofali's Vasant factory to benefit

The Maharashtra state cabinet has approved a soft loan scheme to give relief to cooperative sugar mills in Yavatmal that are facing financial distress. The scheme's main aim is to help pay pending FRP (Fair and Remunerative Price) dues for the 2025-26 crushing season, while also making funds available for preparations ahead of the 2026-27 crushing season. If eligibility conditions are met, the Vasant Cooperative Sugar Factory in Pofali, Umarkhed taluka, could also benefit from the scheme.

The state cabinet meeting approved the scheme along with a total interest subsidy of about Rs 738.51 crore over the next seven years. According to official crushing records, Bhairavnath Sugar Works Limited operated the Vasant Cooperative Sugar Factory on lease during the 2025-26 season. During this season, the factory crushed 1,16,915 metric tonnes of sugarcane, with a sugar recovery rate of 9 percent.

The Vasant Cooperative Sugar Factory has been in the news for several years due to financial difficulties. The factory, which remained shut for a long period, was restarted on a lease basis. In 2019, it emerged that the factory had a debt of around Rs 120 crore. Following this, the factory's operators and management began efforts to repay the debt, which, according to sources, has brought down the total debt amount.

Eligible cooperative sugar mills that do not have pending FRP dues will be able to use this loan for preparations ahead of the 2026-27 crushing season. This will help mills secure the necessary funds before the season begins.

Under the government's new soft loan scheme, the approved loan amount must mainly be used to pay pending FRP dues owed by sugar mills. This means that if the Vasant Cooperative Sugar Factory has eligible pending FRP dues, the scheme could help ensure that farmers who supplied sugarcane to it receive their outstanding payments.