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

Of the about a hundred seventy five registered co-operative sugar factories in Maharashtra, only ninety five crushed cane in the 2020-21 sugar year. Over fifty four per cent of co-operative mills remained dysfunctional.

Directors of majority of the mills say that they will not be capable to start out crushing next 12 months owing to the large losses incurred.

In 2018, of the 178 registered co-operative sugar mills, only one zero one started out crushing operations. Of these 80 noted a complete decline of ₹4,a hundred seventy five crore. In 2019, of the 102 working mills, 59 mills noted a decline of ₹2,474 crore.

The overall financial gain gained by the remaining mills in 2018 and 2019 was a meagre ₹188 crore and ₹399 crore, respectively. In the 2020-21 year, mills forecast additional losses and lower financial gain margins.

Read also: Maharashtra co-operative fraud: How co-op sugar mills turn into private homes

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 Banking institutions. The Condition governing administration, a guarantor to these financial loans, has set up a committee to draft an motion prepare for the bank loan payment.

In 2020, the Maharashtra governing administration passed a resolution to frame requirements to rejuvenate non-operational sugar mills and their allied units on a employ, partnership or collaboration foundation.

Change to private mode

A senior governing administration official mentioned that either the Condition governing administration 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 governing administration and the banking institutions. So, it is their decision on what they want to do with these mills.

“It is not just about mills, but also their control on large land parcels that the mills have obtained at a subsidised value,” he mentioned.

Read additional: How politicians are pocketing sugar mills and their extensive lands

A previous director of Sangli-based mostly Vasantdada Co-operative Sugar Mill, just one of the oldest in the Condition, mentioned the manufacturing unit is becoming run by a private firm as the administrators failed to pay back financial institution personal debt. The mill stands on a sprawling four hundred acres in a prime locality in Sangli town and has land parcels in other destinations.

“The injury brought about by mismanagement, corruption, overstaffing, absence of experienced approach and the higher expense of performing funds is large. Co-operative sugar factories in the Condition are on the deathbed. In the next few yrs, there will be additional private factories working in the Condition when compared to co-operative mills,” he mentioned.

About 164 mills crushed sugarcane in 2010-11. Of these, the quantity of private mills was 41 (twenty five per cent). In the lately-concluded 2020-21 sugarcane year, out of the a hundred ninety working mills, ninety five (fifty per cent) were private mills.

Bitter politics

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

They say that mills make losses not because they have to pay back higher Honest and Remunerative Value (FRP), but because of mismanagement. Co-operative mills and sugarcane farmers in Maharashtra have usually locked horns over the timely payment of the FRP.

Just ahead of the 2019 Condition elections, lots of sugar sector bigwigs, who appreciated power in the Nationalist Congress Bash and Congress regimes, joined the BJP camp sensing the way the wind was blowing. A lot of contested and even gained as BJP candidates.

“As the Enforcement Directorate has initiated a probe from mills and the Centre has set up a new Ministry of Co-procedure underneath Amit Shah, lots of sugar barons who are underneath the scanner might change their loyalties to the BJP,” says political observer Mohan Patil.

Nationalist Congress Bash (NCP) President Sharad Pawar, who solitary-handedly controls Maharashtra’s sugar politics, lately fulfilled Key Minister Narendra Modi pertaining to the ongoing turmoil in the State’s co-operative sector. This is probable to be the commencing of a new political realignment in Maharashtra.

Right after all, the BJP is not capable to digest the point that Maharashtra has slipped out of its arms despite becoming the solitary biggest get together the Assembly and the NCP can not manage to set its sugar satraps underneath the ED scanner, Patil included.

Aspect 1 of the collection: How politicians are pocketing sugar mills and their extensive lands

Aspect 2 of the collection: Maharashtra co-operative fraud: How co-op sugar mills turn into private homes

This is the closing area of a a few-section collection