Agri Business

Nearly 48% of sugar mills operating in Maharashtra privately-owned

Radheshyam Jadhav Pune | Updated on December 14, 2020

In the last decade, the number of private sugar mills has risen constantly, thanks to ailing cooperatives dominated by politicos, say experts

In 1951, India’s first cooperative sugar mill was set up at Pravaranagar in Ahmednagar district and the cooperative movement since gained roots in the State. However, financial mismanagement, lack of professional approach and mills becoming a source of finance to cater to ambitions of politicians has been ailing the cooperative sugar mills.

Today, the sugar cooperative is losing its space to private players. Out of 171 sugar mills operating this season, 48 per cent (82 mills) are private.

In 2010-11, out of 164 operational mills, 41 ( 25 per cent) were private. In 2019-20 the number of private mills went up to 68 ( 46 per cent) out of 147 operational mills.

According to data published by the Maharashtra Sugar Commissioner Office, Solapur and Nanded divisions have more number of private sugar mills operating this season as compared to cooperative sugar mills. Cooperative sugar mills are dominating the sugar belt of western Maharashtra comprising of Pune, Kolhapur and Ahmednagar. But private players have penetrated this region as well.

Out of 36 sugar mills operational this season in Kolhapur, 11 are privately owned. In Pune and Ahmednagar, 28 and 25 mills are operational, respectively. Pune has 12 private mills while Ahmednagar has 10. the maximum number of private mills (24 out of 37 mills) are located in Solapur - a region that faces perennial water scarcity.

Total production

A total of 89 cooperative sugar mills in Maharashtra have crushed 143.24 LMT sugarcane to produce 133.50 lakh quintal sugar with extract rate of 9.32 per cent by December 11. While 82 private mills have crushed 122.62 LMT sugarcane producing 105.85 lakh quintal sugar at an extract rate of 8.63 per cent.

Sugar industry experts predict that the private industry will take over the cooperative sugar sector in the next few years. In the last decade, the number of private sugar mills has risen constantly, thanks to ailing cooperatives dominated by politicos.

Agriculture expert Nishikant Bhalerao said that sugar mills are used by politicians to finance their politics and control the vote bank of sugarcane farmers. He added that the majority of sugar cooperatives are incurring losses owing to inefficient and unprofessional handling of operations.

Ruling parties have supported their leaders to open sugar factories by providing subsidies and land at concessional rates. The Maharashtra State Cooperative Bank, dominated by all party leaders, has backed mills with a continuous flow of finance.

“But now the State government and the State Cooperative are not able to handle the burden of cooperative mills. Politicians are losing interest in cooperative and are venturing into the private sector. In fact, many cooperative sugar mills which stopped operations because of heavy loan burdens are being taken over by politicians who are running them as private venture,” said one of the directors of the prominent cooperative sugar mills in Sangli district which is being run by a private company.

Published on December 14, 2020

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