Agri Business

Private sugar mills hit the sweet spot in Maharashtra

Radheshyam Jadhav Pune | Updated on June 17, 2020 Published on June 17, 2020

More private mills crushed sugarcane than cooperative mills in the drought-prone zones of Aurangabad, Nanded, Amravati, and Nagpur   -  THE HINDU

Rising interest of politicians in sector could spell end of co-op mills

The space occupied by private players in Maharashtra’s sugar industry has grown substantially in the last 10 years. Of the 164 mills that crushed sugarcane in 2010-11, the number of private mills was 41, or 25 per cent. This year (2019-20), 147 mills have commenced crushing, of which 68 mills (46 per cent) were privately owned.

However, this is not a sudden transformation. Since 2008-09, the number of private players has increased in a sustained manner and industry players predict that private mills might take over cooperative sugar mills in the next few seasons.

Interestingly, according to data published by the Maharashtra Sugar Commissioner office, more private mills crushed sugarcane than cooperative mills in the drought-prone zones of Aurangabad, Nanded, Amravati, and Nagpur. In fact, in the Amravati and Nagpur zones, only private mills crushed cane this season. These zones have historically recorded the highest number of farmer suicides.

Major draw

Agriculture expert and activist Sampatrao Pawar said many of the politicians who took interest in cooperative sugar mills later realised that they could churn more profits in private ventures. Not surprisingly, the cooperative mills that were running into losses became profitable when taken over by private companies.

Massive subsidies, high returns and support from financial institutions and the State attracted regional satraps towards sugar mills. Over the past few years, the Maharashtra State Cooperative Bank (MSCB) has started attaching the assets of defaulting sugar mills by auctioning them to private players. Those who bid were either politicos or those having political connections, alleged Pawar. The MSCB is dominated by sugar baron-politicians, across party lines.

“The sugar economy plays a major role in the State’s politics. Sugar mills are the lifeline of many politicians,” said agriculture expert Nishikant Bhalerao. He added that private players playing a prominent role in the sugar industry will eventually lead to the end of cooperative sugar mills.

Humble beginnings

Vitthalrao Vikhe Patil is credited with starting the first cooperative sugar mill in Asia. He organised farmers in the Pravanagar area in Ahmednagar district way back in 1948 and established a co-operative sugar factory, which was commissioned in 1950. Seventy years after the first cooperative sugar mill came up in Maharashtra, private mills have started dominating the scene.

“It means that farmers who were co-owners in the form of shareholders in the cooperative sugar mills will have to depend on the whims and fancies of private players,” said Baba Sawant, a farmer in Sangli. However, farmers like Sanjay Chavan believe that in contrast to the corruption levels in many cooperative sugar mills, private players work more efficiently.

Meanwhile, this season, 147 mills in Maharashtra, including cooperative and private, crushed 545 tonnes of sugarcane to produce 616.12 lakh quintals of sugar.

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Published on June 17, 2020
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