Maha sugar industry faces govt wrath

Written by Sanjay Jog | Mumbai | Updated: Jan 6 2009, 05:53am hrs
Maharashtra's ailing sugar industry, which contributes over 30% to India's sugar production, will have to swallow a bitter pill. Apart from the sugar industry confronts a dip in production, the cooperative mills will face stern action on the part of the state government if they fail to bring in professionalism in operations.

Sugar production will be down to 47 lakh tonne at the end of the current crushing season that ends in 2009 against 91 lakh tonne in 2007-08. The government has hinted that a clean up operation will be launched soon unless the cooperative sugar mills improve their functioning.

"I am aware that the state's sugar sector is passing through a hard time and the government will help the sector survive the difficult phase. However, cooperative mills have to professionally manage their operations and compete with the private sector. The government will carry out the clean up operation," chief minister Ashok Chavan said at the 52nd general body meeting of the Federation of Cooperative Sugar Factories of Maharashtra.

Due to less availability of sugarcane, about 110 cooperative sugar factories of the 141, which have already started crushing since November 15, will wind up their operations by February 15 while the remaining mills will be able to go till the end of March. Against the original estimates of sugarcane availability of 550 lakh tonne, the revised estimates show that only 450 lakh tonne sugarcane will be available to produce 47 lakh tonne at 11% recovery.

Already four cooperatives, which had started crushing after receiving the bank advances and state government guarantees, have closed down for want of sugarcane and some more may follow the suit.

State cooperation minister Harshvardhan Patil, who was also present at the meeting, said that painting a gloomy picture for the sugar sector in the state indicated that the state government and sugar commissioner would deal with a firm action against those sugar mills which have stopped crushing even after taking the benefit of the bank advances and the state government guarantee.

On top of it, Chavan asked the cooperative sugar mills to shape up or ship out. He indicated to take harsh and ruthless steps to bring in more professionalism and accountability in the sector.

Chavan asked the cooperation department to immediately take decision on the fate of five closed mills. He suggested that tender would be issued for their disposal giving preference to cooperative sector adding thatif the response from the cooperative sector was not encouraging, private sector would be considered. He said that necessary steps would be taken to revise power purchase rates for cogeneration projects.