INDIA: Maha government to buy 25% of coop sugar production

Published: 02/14/2018, 7:58:13 AM

The cooperation department of the state government has moved a proposal to buy 25% of the sugar produced by sugar cooperatives. The order is aimed at placating sugarcane growers in the state who are currently restless as their dues are not being paid by sugar cooperatives, according to the Mumbai Mirror newspaper.

According to a senior official from the cooperation department, who did not wish to be named, said, "Chief Minister Devendra Fadnavis is in favour of the proposal and he has directed the cooperation department to prepare a detailed note on the issue and table it before the state cabinet for approval."

According to sources in cooperation department, the state government has shown willingness to sugar from sugar cooperatives at INR32,000 (US$498.6) per tonne. This, the government feels, will also help keep prices of sugar steady in the market.

The sugarcane is a politically sensitive crop in Maharashtra as nearly 3 million farmers are engaged in sugarcane farming. In the last Congress-NCP government, out of 30 cabinet ministers, 11 ministers controlled one or more sugar cooperatives in their districts with many of them owning private sugar factories. Under the current Sena-BJP government, the hold of sugar cooperatives on state politics has reduced but not diminished. Even in the present cabinet, out of 22 cabinet ministers five control sugar cooperatives in their districts or own private sugar factories.

According to a senior cooperation department official, this year government declared the fair and remunerative price of sugarcane (FRP) at INR2,550 per tonne. It was assumed that the prices of sugar will be around INR35,000 per tonne. However, currently sugarcane prices are hovering around INR28,000 to INR29, 000 per tonne, while in international market the prices have dropped to INR21,000 per tonne.

Because of this price situation, sugar cooperatives in the state are not in a position to pay the FRP declared by the government, and they have been lobbying for state government to buy 25% of their total production. The sugar cooperatives have so far not cleared the dues to farmers amounting to INR20 billion.

Maharashtra accounts for nearly one third of sugar production in the country. This year, the area under sugarcane cultivation is around 9 lakh hectares and it is expected to produce 72.2 million tonnes of sugarcane while sugar production is expected to be around 7.34 million tonnes.

Political analyst believe these largesses are being showered by the BJP-led governments in the states and at the Centre after the results of Gujarat assembly elections and three by-polls in Rajasthan.

In Gujarat, BJP's tally came down from 117 seats to 99 while in Rajasthan, the party lost all three Assembly seats which went to polls.