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 ninety five crushed cane in the 2020-21 sugar year. Above fifty four for each cent of co-operative mills remained dysfunctional.

Administrators of majority of the mills say that they will not be capable to start crushing subsequent year owing to the big losses incurred.

In 2018, of the 178 registered co-operative sugar mills, only a hundred and one started out crushing functions. Of these eighty claimed a whole loss of ₹4,one hundred seventy five crore. In 2019, of the 102 functioning mills, fifty nine mills claimed a loss of ₹2,474 crore.

The total income gained by the remaining mills in 2018 and 2019 was a meagre ₹188 crore and ₹399 crore, respectively. In the 2020-21 year, mills predict extra losses and reduced income margins.

Go through also: Maharashtra co-operative fraud: How co-op sugar mills come to be personal properties

Now, 57 co-operative sugar factories have expressed incapacity to repay loans of about ₹3,000 crore taken from Maharashtra Point out Co-operative Financial institution (MSCB), Mumbai Financial institution, and Nanded and Osmanabad District Central Co-operative Banking companies. The Point out govt, a guarantor to these loans, has established up a committee to draft an action plan for the loan payment.

In 2020, the Maharashtra govt passed a resolution to body conditions to rejuvenate non-operational sugar mills and their allied units on a seek the services of, partnership or collaboration basis.

Shift to personal method

A senior govt official said that possibly the Point out govt 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 govt and the banking institutions. So, it is their determination on what they want to do with these mills.

“It is not just about mills, but also their control on big land parcels that the mills have obtained at a subsidised selling price,” he said.

Go through extra: How politicians are pocketing sugar mills and their large lands

A previous director of Sangli-dependent Vasantdada Co-operative Sugar Mill, one particular of the oldest in the Point out, said the factory is remaining run by a personal corporation as the administrators failed to pay bank financial debt. The mill stands on a sprawling four hundred acres in a primary locality in Sangli metropolis and has land parcels in other sites.

“The harm prompted by mismanagement, corruption, overstaffing, absence of skilled technique and the large value of functioning funds is big. Co-operative sugar factories in the Point out are on the deathbed. In the subsequent couple of a long time, there will be extra personal factories functioning in the Point out compared to co-operative mills,” he said.

About 164 mills crushed sugarcane in 2010-eleven. Of these, the variety of personal mills was 41 (25 for each cent). In the a short while ago-concluded 2020-21 sugarcane year, out of the 190 functioning mills, ninety five (fifty for each cent) ended up personal mills.

Bitter politics

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

They say that mills make losses not for the reason that they have to pay higher Honest and Remunerative Price (FRP), but for the reason that of mismanagement. Co-operative mills and sugarcane farmers in Maharashtra have often locked horns around the timely payment of the FRP.

Just forward of the 2019 Point out elections, a lot of sugar sector bigwigs, who loved power in the Nationalist Congress Bash and Congress regimes, joined the BJP camp sensing the route the wind was blowing. Quite a few contested and even won as BJP candidates.

“As the Enforcement Directorate has initiated a probe against mills and the Centre has established a new Ministry of Co-operation beneath Amit Shah, a lot of sugar barons who are beneath the scanner might shift 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, a short while ago fulfilled Primary Minister Narendra Modi relating to the ongoing turmoil in the State’s co-operative sector. This is possible to be the beginning of a new political realignment in Maharashtra.

Right after all, the BJP is not capable to digest the simple fact that Maharashtra has slipped out of its palms irrespective of remaining the solitary biggest social gathering the Assembly and the NCP cannot find the money for to place its sugar satraps beneath the ED scanner, Patil added.

Component 1 of the collection: How politicians are pocketing sugar mills and their large lands

Component 2 of the collection: Maharashtra co-operative fraud: How co-op sugar mills come to be personal properties

This is the remaining area of a three-section collection