Maharashtra govt, sugar stalwarts to draw roadmap to streamline sugar sector

The conglomerate to review flaws and suggest measures for sustainable growth

Twenty-five representatives from the cooperative and private sugar factories in Maharashtra with connections to the ruling Bharatiya Janata Party (BJP) and opposition parties the Congress and the Nationalist Congress Party (NCP) will meet here on Wednesday to review the flaws in the sugar sector and suggest ways for its growth.

The representatives have been invited to the Mumbai office of Federation of Cooperative Sugar Factories in Maharashtra for a brain-storming session. Maharashtra cooperation minister Chandrakant Patil will also be present in the meeting.

There are 99 cooperative sugar factories and 79 private units are operational in the state. These factories have produced a record 10.3 million tonnes of sugar till date.

Wednesday's meeting comes at time when only 40 out of the 157 factories have paid the fair and remunerative price (FRP). In Maharashtra, the FRP for 9.5 per cent recovery of sugar from cane is Rs 2,200 a tonne. There will be a rise of Rs 232 a tonne in FRP for every one per cent rise in recovery.

During the Assembly election campaign, the BJP had targeted the Congress-NCP combine for their alleged corruption and favouritism in the cooperative sugar factories. However, after assuming power, the party has admitted the sector needs to be revived in view of its contribution to the growth in the rural Maharashtra as well as to the state kitty through various taxes.

The state government has already announced an interest-free loan of Rs 2,000 crore and waive sugarcane purchase tax to enable factories to pay FRP to cane growers.

A cooperative sugar factory promoter and former minister, who will be present at Wednesday's interactive session, told Business Standard: “The Rs 36,000-crore sugar sector in Maharashtra contributes one-third to the national sugar production. Farmers are the promoters of a cooperative sugar factory, but some of them lack professionalism and transparency during their functioning which has brought disrepute to the entire sector. Factories will have to become self-dependent by judicious use of fund and also by diversifying into co-generation, distillery and production of ethanol, molasses.”

This apart, he said factories would also have to convince the sugarcane growers to use drip irrigation, go in for high productivity cane crop and thereby increase production.

He added the participants would also discuss various options whereby the sugar sector, the Central and state governments, banks, and financial institutions can make the sector financially sound and sustainable.