MAHARASHTRA CM Sushil Kumar Shinde needs no support from sugar barons. But his 69 cabinet members do. The latest instance is the demand for the government to stand guarantee for the conversion of sugar co-operatives losses to mid-term loans.Three weeks after the government decided not to accord financial guarantees, politicians across party lines forced the Shinde government to go back on its stand. On March 19, the cash-starved state government agreed to stand guarantee for the conversion of the Rs 1,578-crore losses of 141 cooperative sugar factories into medium term loans. Patronised by the state in the past, Maharashtra’s cooperative sugar sector is ill-equipped to face the new rules of the market. Falling international prices, decreasing yields and the decreasing State support has hit panic buttons. Even Sharad Pawar now demands `no more factory clearance.’.The first blow to the lobby came when the Centre decided to decontrol sugar. When Allahabad High Court ordered in April 2002 to change the parameters of the release of sugar in the open market by sugar manufacturers, the situation further aggravated. Now the producers have to sell 90 per cent of the crop in the open market, where the prices are lower than the levy. A report dated February 15, 2003 opposed any government guarantee to 52 sugar factories that were financially weak. Consider the list of politicians receiving such guarantees: from BJP national vice president Gopinath Munde, Maharashtra assembly speaker Arun Gujarathi, MPCC president Ranjit Deshmukh, State Minister Manik Thakare, former MP Prafulla Patel and State Cooperative Bank chairman Gulabrao Shelke.Another shocking revelation came in the State assembly just last week. A mukadam — supervisor — at the Kada cooperative factory was found to be just five years old. He was paid Rs 1.5 lakh.The State government has now realised that bowing to the sugar lobby’s demands would not take it anywhere. In the last two months, the government has denied permissions to 69 new factories, all of them floated by political heavyweights.
