Pawar tells sugar co-ops to turn professional

Says if the cooperative sugar sector fails to introduce professionalism in its operations, it shall stop seeking his help

Agriculture Minister Sharad Pawar on Saturday asked the cooperative sugar sector in Maharashtra to turn competitive, professional and innovative, owing to the rising competition from private companies.

Speaking at the 57th annual general meeting of the Federation of Cooperative Sugar Factories in Maharashtra, a representative body of about 170 cooperative units, he called upon cooperative units to adhere to austerity measures, focus on increasing per-hectare productivity and reduce reliance on state and central governments. He cautioned if these units continued to spend recklessly and didn't become financially prudent, banks would stop giving them loans.

He indicated if the cooperative sugar sector failed to introduce professionalism in its operations, it should stop seeking his help.

"Some district central cooperative banks have collapsed due to their heavy exposure to the cooperative sugar sector. This is not a good sign, as the state government, which has provided guarantees to a couple of units, wouldn't allow this situation to prevail, especially when banks also lend to other crops and sectors," he said.

At least 2.5 million tonnes (mt) of sugar should be exported this season, as this would help the industry improve the domestic sugar market, he said. His suggestion comes at a time when India's carry-forward stock stands at nine mt and production in the 2013-14 season is expected at 25 mt.

Most cooperative sugar mills are reeling under heavy financial burden. Maharashtra's sugar sector accounts for 30 per cent of the national output and contributes about Rs 4,500 crore in taxes to the state and central governments.

Pawar said in the long term, the partial decontrol of the sugar sector would help farmers, as well as the entire segment. Earlier, Vijaysinh Mohite-Patil, chairman of the Federation of Cooperative Sugar Factories in Maharashtra, urged the Centre to impose import duty of 30 per cent, instead of the current 15 per cent.

He also sought transport subsidy from the central and state governments.