As co-operative units struggle, private mills crush more sugarcane in Maharashtra

07 December 2021, Maharashtra, India: Compared to 190 sugar mills that started the crushing season last year, 173 sugar mills including 86 co-operative mills and 87 private mills have commenced sugarcane crushing this year in Maharashtra. 

By December 4, 173 mills have crushed 245.52 lakh tonnes sugarcane to produce 227.38 lakh quintals of sugar with an extract rate of 9.26 per cent.

Interestingly, no co-operative sugar mill has started crushing season in Amravati and Nagpur divisions. In the drought-prone Solapur division, the highest number of sugar mills (41) have started operations of which 26 mills are private.

In Aurangabad and Nanded divisions, more private mills are operating compared to co-operative mills. 

Following UP Pattern?

During this sugarcane season, many mills are still struggling to start operations as the State Sugar Commissioner refused to issue operation licenses to mills that failed to pay FRP to farmers. Maharashtra mills still have to pay FRP arrears of ₹394 crore to farmers for the cane crushed last season.

Sugarcane farmer Ashok Jadhav says more farmers are moving towards private mills. “Co-operative mills delay the payment of FRP. Private mills are operating in a more professional way,” he says. 

Interestingly, many major sugar mills, including Sangli’s Vasantdada co-operative sugar mill, are being run by private companies as the boards of the mills expressed their inability to run the mills.

According to the NITI Aayog Task Force report titled ‘Sugarcane and Sugar Industry’ published last year, there were about 530 functioning sugar mills across the country, two-thirds of which were privately-owned entities. “Private sugar mill ownership is widespread in Uttar Pradesh. The remaining sugar mills run as co-operatives, whereby farmers are collective owners of those mills. This kind of sugar-mill ownership is prevalent in Maharashtra,” the report noted.

However, private players are playing a major role in Maharashtra’s sugar industry as co-operative mills are mired in corruption controversies. Many of the co-operative mills started by politicians remain non-operational and have not repaid the loans taken from the State co-operative bank.