Saved By Business

Maharashtra co-operative fraud: Endgame for co-operative sugar factories?

4 min read

Of the about a hundred seventy five registered co-operative sugar factories in Maharashtra, only 95 crushed cane in the 2020-21 sugar season. About 54 for each cent of co-operative mills remained dysfunctional.

Directors of bulk of the mills say that they will not be able to begin crushing following year owing to the enormous losses incurred.

In 2018, of the 178 registered co-operative sugar mills, only one hundred and one commenced crushing functions. Of these 80 claimed a overall loss of ₹4,a hundred seventy five crore. In 2019, of the 102 working mills, fifty nine mills claimed a loss of ₹2,474 crore.

The overall profit attained by the remaining mills in 2018 and 2019 was a meagre ₹188 crore and ₹399 crore, respectively. In the 2020-21 season, mills predict additional losses and lessen profit margins.

Browse also: Maharashtra co-operative fraud: How co-op sugar mills become private attributes

Now, 57 co-operative sugar factories have expressed incapability to repay financial loans of about ₹3,000 crore taken from Maharashtra Condition Co-operative Financial institution (MSCB), Mumbai Financial institution, and Nanded and Osmanabad District Central Co-operative Banks. The Condition authorities, a guarantor to these financial loans, has established up a committee to draft an motion system for the financial loan payment.

In 2020, the Maharashtra authorities passed a resolution to frame criteria to rejuvenate non-operational sugar mills and their allied models on a employ the service of, partnership or collaboration basis.

Change to private mode

A senior authorities official mentioned that both the Condition authorities will have to repay the personal debt or the banking institutions will have to auction the mills.

“All these mills are dominated by politicians, who also have a say in the authorities and the banking institutions. So, it is their final decision on what they want to do with these mills.

“It is not just about mills, but also their regulate on enormous land parcels that the mills have acquired at a subsidised cost,” he mentioned.

Browse additional: How politicians are pocketing sugar mills and their large lands

A former director of Sangli-based Vasantdada Co-operative Sugar Mill, one of the oldest in the Condition, mentioned the factory is currently being operate by a private organization as the directors unsuccessful to spend bank personal debt. The mill stands on a sprawling 400 acres in a key locality in Sangli metropolis and has land parcels in other areas.

“The injury induced by mismanagement, corruption, overstaffing, absence of specialist method and the high charge of doing the job funds is enormous. Co-operative sugar factories in the Condition are on the deathbed. In the following number of years, there will be additional private factories working in the Condition when compared to co-operative mills,” he mentioned.

About 164 mills crushed sugarcane in 2010-eleven. Of these, the selection of private mills was 41 (25 for each cent). In the not too long ago-concluded 2020-21 sugarcane season, out of the a hundred ninety working mills, 95 (50 for each cent) have been private mills.

Bitter politics

All farmer leaders say that sugar barons have looted farmers and fuelled their individual political ambitions by employing the co-operative income for elections.

They say that mills make losses not since they have to spend bigger Honest and Remunerative Cost (FRP), but since of mismanagement. Co-operative mills and sugarcane farmers in Maharashtra have regularly locked horns in excess of the well timed payment of the FRP.

Just in advance of the 2019 Condition elections, a lot of sugar sector bigwigs, who appreciated electric power in the Nationalist Congress Social gathering and Congress regimes, joined the BJP camp sensing the path the wind was blowing. Quite a few contested and even received as BJP candidates.

“As the Enforcement Directorate has initiated a probe from mills and the Centre has founded a new Ministry of Co-operation underneath Amit Shah, a lot of sugar barons who are underneath the scanner may shift their loyalties to the BJP,” suggests political observer Mohan Patil.

Nationalist Congress Social gathering (NCP) President Sharad Pawar, who solitary-handedly controls Maharashtra’s sugar politics, not too long ago met Prime Minister Narendra Modi about the ongoing turmoil in the State’s co-operative sector. This is probably to be the commencing of a new political realignment in Maharashtra.

Immediately after all, the BJP is not able to digest the truth that Maharashtra has slipped out of its palms irrespective of currently being the solitary largest social gathering the Assembly and the NCP simply cannot manage to put its sugar satraps underneath the ED scanner, Patil added.



This is the remaining section of a three-portion collection