Agitating unions delay Maharashtra cane crushing season

The sugar industry in Maharashtra, facing widespread agitation by various unions, has missed the launch of the 2011-12 cane crushing season, which begins on October 1 every year.

The unions have been demanding much higher payments as advances to the sugarcane growers. Sugar mills — both cooperative and private — have sought the state government’s intervention at the earliest for arriving at an understanding with the unions. The government has convened a meeting on Monday to look into the issues so that mills start crushing without further delay.

According to estimates of the state cooperative department, about 175 mills comprising 128 cooperative and 47 private are expected to participate in the current crushing season, compared to 164 in 2010-11. Maharashtra is expected to have a sugar production 9.3 million tonnes (mt) in 2011-12, compared to 9 mt a year ago.

This was because the availability of sugarcane has been increased by five per cent. Millers would have to crush a record 82.5 mt of sugarcane during the current season against 80.3 mt in 2010-11.

Of the 175 mills, a few may begin crushing after Dusshera (which falls on Thursday), while the rest may join in phases till November 1.

An industry representative, who did not want to be identified, told Business Standard: “One union is demanding a payment of Rs 3,300 a tonne as the first advance to the growers, while another is demanding Rs 3,000 a tonne. This is quite well above the fair and remunerative price of Rs 1,375 per tonne fixed by a ministerial committee chaired by the Chief Minister Prithviraj Chavan. The mills would be complete broke if they have to pay such a higher price. Unions need to understand that the first advance is not the last payment and should arrive at an understanding which will protect the interests of both mills and sugarcane growers.”

He said mills are currently incurring a loss of Rs 150 per quintal. Against the cost of production of Rs 2,700 a quintal, the ex-mill realisation is of the order of Rs 2,550 a quintal.

A senior official of the cooperation department said the government was quite concerned over the current situation. “We are hopeful that a compromise formula will be worked out in the Monday’s meeting, which will be attended by the chairman and members of the Federation of Cooperative Sugar Mills in Maharashtra, representatives of unions and officials of the department.”