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

Of the about one hundred seventy five registered co-operative sugar factories in Maharashtra, only 95 crushed cane in the 2020-21 sugar year. Around fifty four per cent of co-operative mills remained dysfunctional.

Administrators of greater part of the mills say that they will not be capable to begin crushing future 12 months owing to the massive losses incurred.

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

The general earnings earned by the remaining mills in 2018 and 2019 was a meagre ₹188 crore and ₹399 crore, respectively. In the 2020-21 year, mills predict more losses and reduced earnings margins.

Read through also: Maharashtra co-operative fraud: How co-op sugar mills become non-public homes

Now, fifty seven co-operative sugar factories have expressed incapability to repay loans of about ₹3,000 crore taken from Maharashtra State Co-operative Lender (MSCB), Mumbai Lender, and Nanded and Osmanabad District Central Co-operative Banking companies. The State governing administration, a guarantor to these loans, has set up a committee to draft an motion system for the personal loan payment.

In 2020, the Maharashtra governing administration passed a resolution to frame conditions to rejuvenate non-operational sugar mills and their allied models on a seek the services of, partnership or collaboration foundation.

Change to non-public mode

A senior governing administration official claimed that both the State governing administration will have to repay the financial 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 management on massive land parcels that the mills have acquired at a subsidised cost,” he claimed.

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

A former director of Sangli-dependent Vasantdada Co-operative Sugar Mill, one of the oldest in the State, claimed the manufacturing facility is remaining run by a non-public corporation as the administrators failed to spend lender financial debt. The mill stands on a sprawling 400 acres in a prime locality in Sangli town and has land parcels in other locations.

“The problems triggered by mismanagement, corruption, overstaffing, absence of qualified tactic and the substantial value of doing the job cash is massive. Co-operative sugar factories in the State are on the deathbed. In the future several a long time, there will be more non-public factories running in the State as opposed to co-operative mills,” he claimed.

About 164 mills crushed sugarcane in 2010-eleven. Of these, the amount of non-public mills was 41 (twenty five per cent). In the just lately-concluded 2020-21 sugarcane year, out of the a hundred ninety running mills, 95 (50 per cent) have been non-public mills.

Bitter politics

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

They say that mills make losses not because they have to spend larger Truthful and Remunerative Selling price (FRP), but because of mismanagement. Co-operative mills and sugarcane farmers in Maharashtra have frequently locked horns around the well timed payment of the FRP.

Just ahead of the 2019 State elections, a lot of sugar sector bigwigs, who appreciated ability in the Nationalist Congress Party and Congress regimes, joined the BJP camp sensing the path the wind was blowing. Lots of contested and even gained as BJP candidates.

“As the Enforcement Directorate has initiated a probe against mills and the Centre has proven a new Ministry of Co-procedure less than Amit Shah, a lot of sugar barons who are less than the scanner could change their loyalties to the BJP,” says political observer Mohan Patil.

Nationalist Congress Party (NCP) President Sharad Pawar, who single-handedly controls Maharashtra’s sugar politics, just lately met Primary Minister Narendra Modi relating to the ongoing turmoil in the State’s co-operative sector. This is very likely to be the beginning of a new political realignment in Maharashtra.

Soon after all, the BJP is not capable to digest the point that Maharashtra has slipped out of its fingers regardless of remaining the single biggest get together the Assembly and the NCP are unable to find the money for to set its sugar satraps less than the ED scanner, Patil extra.

This is the remaining portion of a three-portion sequence