Maharashtra stops auction of sugar factories run by cooperative sector

The state government has taken a policy decision to disallow sale of loss-making sugar factories run by cooperative societies

Written by Express News Service | Mumbai | Published: September 6, 2013 3:04 am

The state government has taken a policy decision to disallow sale of loss-making sugar factories run by cooperative societies. The decision comes in wake of growing unrest in rural Maharashtra,as sugar cooperatives are increasingly being privatised without adequate compensation to farmers,who have given their land and hold stakes in the units.

Minister for Cooperation Harshvardhan Patil said,“The decision was inevitable to salvage the cooperative sector and arrest the backlash from farmers and people in rural Maharashtra.”

The takeover of existing units by private players leads to conflict and unrest,he admitted. “If anybody wants to set up a separate private unit,it is alright. But to auction the existing ones to private players creates problems.”

He said,“Of 168 sugar factories,26 have been auctioned and 22 that are up for auction will be provided some way out to ensure financial stability. Of these,seven have been given out on a long-term lease basis to neighbouring cooperatives and will be handed over to farmers once they become profitable.”

Patil said,“We want the ownership of these factories to remain with farmers. We are working out a long-term policy wherein these sick factories can be leased out for a long period and once the debt is cleared,they can be handed back to farmers. In no condition will sick sugar factories be auctioned to private entities by state or district cooperative banks.”

The minister claimed,“Despite a rough phase in the cooperative sector,70 per cent of sugar production is through factories owned by cooperatives.” Seven cooperative sugar factories in Satara,Kolhapur and Osmanabad have been rented out for a lease period between 11 and 19 years.

In 2013-14,640 lakh metric tonnes of sugarcane production is expected,which would be 20 per cent less than last year. Of this sugarcane,73.4 lakh metric tonnes of sugar will be produced.

Patil added that in the next five to seven years,all sugarcane cultivation will be brought under drip irrigation to stop the declining production of sugarcane in Maharashtra compared to other states. Of the 168 cooperative sugar factories in the state,26 have been auctioned,40-45 of them are sick while 80 are financially very strong.

Overall,105 are run by cooperative societies and there are 79 private sugar factories in the state. Patil said the sugar crushing period will start from November 1 and will last for 120 days.

State wants to increase ethanol blending to 10%

mumbai: Minister for Cooperation Harshvardhan Patil said Maharashtra will soon send a proposal to the Centre seeking permission to increase permissible ethanol blending from five to 10%. He said the state’s demand for ethanol,a green fuel,is 140 crore litres annually (of which 32 crore litres is demanded by oil companies). Even as the state has signed agreements for production of 4.2 crore litres,the actual generation is only 2.2 crore litres. “If the blending limit is increased to 10 per cent,more companies will come forward and Maharashtra will be able to produce 100 crore litres ethanol annually,” said Patil.

Ethanol is generated from sugar molasses.

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