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CRISIS IN THE SUGAR COOPERATIVE Maharashtra

CRISIS IN THE SUGAR COOPERATIVE Maharashtra (India)

MR. Vijay Kumbhar *

Introduction

After Independence, the industry has witnessed a change of location. The sugar industry was located for some time in the UP and Bihar. For once in 1960-61 about 60% of sugar, wine production of these two states. The southern or tropical states like Maharashtra, Tamil Nadu, Karnataka and become major sugar producing states. Its efficiency in production is higher and the cost of production is lower compared to the sugar factories in UP and Bihar. Cooperative sugar mills in Maharashtra are half important as comprehensive and integrated rural development.

The sugar industry is a major industry in Maharashtra organized, dependent to a significant sector unstructured. As industry has been organized on the principles of cooperation, his responsibility is to transform rural life. Socioeconomic life of the farmers have suffered a complete change from the installation of sugar cooperatives in rural areas. Pandit Jawaharlal Nehru, Dr. DRGadgil, Vaikunthbhai Mehta, Chavan Yashvantrao, Vitthalrao Vikhe Patil, Patil Dr.Vasantdada were pioneers in bringing the ideology of the Agro Industrial Co-operative Commonwealth in practice. The rural employment – both in agriculture and in the industrial sector has increased dramatically since the establishment of sugar factories in Maharashtra.

Maharashtra state has 173 cooperatives and 23 private sugar factories, but a total of 141 cooperative factories are working only in 2007. The cooperative sugar sector is objective of welfare of the people that need to be organized and operated more efficiently. Among Indian states, Maharashtra tops in sugar production and sugar recovery. Due to the weight loss nature of sugar cane, all sugar factories were established in the area of sugarcane sugar. These plants play important role in socio-economic development of rural areas of Maharashtra. India accepted the New Economy Policy in 1991. This policy has three dimensions namely, liberalization, privatization and globalization. This policy raises competition among sugar factories private and cooperative. The last two decades, the sugar industry in Maharashtra has faced various internal and external problems. In this article we will try to discuss some problems and suggest measures to solve it.

1. Objectives and Methodology

The intention of this research is review the progress of the sugar industry in Maharashtra, to study the change of policy in relation to the sugar industry and know the problems faced by Sugar co-workers in Maharashtra. In our study we will try to suggest some practical suggestions for solving these problems.

This research is based in the secondary data that is input from the Economic Survey of Maharashtra – 2008, some reports published by the Maharashtra State Cooperative Sugar Factories Federation Ltd., the National Federation of Cooperative Sugar Factories Limited and several web sites related to sugar industries.

2. Progress sugar industry in Maharashtra

The state of Maharashtra came into existence on May 1, 1960. Located in the tropical belt. A company British established a sugar factory in the direct delivery of sugar cane in 1919 Haregaon in Ahmednagar district. In group Walchand 1930 ' erected a sugar factory in Walchandnagar in the district of Pune. In 1932 the Government of India has granted the tax protection of the sugar industry. Next year is it that in 1933 sugar factories Phaltan, Kolhapur and Rawalgaon came into existence. In 1934, three sugar factories were established in belwandi, Malinagar and Tilaknagar. In 1939, two factories and Shripur Sakharwadi and in 1941 created more than two and Changdeonagar Laxmiwadi approached, making the total number of 12 factories sugar in the region. All of them were in the private sector.

In 1945, an irrigation conference was held under the chairmanship of DRGAdgil where the proposal to establish a sugar factory in a cooperative manner was proposed and unanimously confirmed the decision to establish a sugar factory Loni, Vitthalrao Vikhe Patil took up the challenge of Praveen Cooperative Sugar Factory. This sugar factory becomes the precursor of the sugar industry cooperation held movement throughout the country. Sugar factories for the production, the area of sugar cane and production of sugarcane in Maharashtra from 1953-54. Total number of sugar factories in the cooperative sector increased 01-173 within five decades, but today only 141 sugar factories cooperation are working. The number of private sugar factories are declined until 1990, but in the era of the New Economic Policy factories private sector increases sugar 04-22. Government policy is favorable to increase the sugar factories in the private sector in this period. In the same period the area under sugarcane increased from 1.98 lakh hectares to 10.17 hectares and the production of sugar cane also lakh increased from 48.36 lakh tonnes to 834.44 lakh tonnes. cooperative sugar mills have started the department of agricultural development and through this department it supports to farmers for the cultivation of sugar cane crop. Area total and the production of total sugar increases.

From the last fifty years the installed capacity of sugar factories in Maharashtra has increased rapidly. N of the sugar factories have adopted modern technology for the production of sugar. Investment in the sugar factory also increases. The installed capacity of sugar factories cooperation is increased by 853.6 times and private sugar factories installed capacity increased by 1.97 times in the period from 1980-81 to 2006-07. This shows the development of cooperative sugar factories is very rapid private sugar factories.

The state of Maharashtra emerged as a leading state in India with respect to the production of sugar. The higher productivity of the sugar industry in Maharashtra, compared with the average for India is also noteworthy. There are also higher recovery of sugar obtained from sugar factories in Maharashtra, which was "between" the 10.47% to 12.20% as compared to all India average 10.20% in 2003-04.

The development of sugar cooperatives in Maharashtra due to the favorable policy government with respect to sugar prices and sugar cane. These factories are strictly factory farmer. As a result, farmers are keen in the development of sugar cooperatives. They have become more central agencies of economic and development efforts within their own area. Once a cooperative factory starts, the effective operation in the area, the members realized the benefits of cooperative efforts and look forward to the expansion of facilities that can be made available through the society. The development of sugar cooperatives in Maharashtra have to be largely attributed to the leadership of the late Yashwantrao Chavan. The role of political leaders has become important and this has led to the growth of the sugar industry. Government involvement with Shree Vikhe Patil, an eminent DRGadgil thinker and teacher is important to the growth of cooperative sugar factories on a large scale in 1950.

  3. Sugar Policy Change:

            The Sugar Development Fund was created in 1982 to advance soft loans for the rehabilitation and modernization of the sugar industry and for development production of sugarcane in the area of the sugar factory. The Sugar Development Fund makes grants made from projects research for development of the sugar industry.

Indian Institute of Sugar Technology in Kanpur has been created to improve technological efficiency industry. According to the government's policy (announced on November 1, 1999 and amendments declared August 20, 1998) license to publish new factories except that there is no sugar factory in a radius of 15 km. Along with the new sugar factory will be licensed for a minimum crushing capacity 2500 tons per day.

The sugar industry is influenced by the Central Government's policy of sugar, but also affects farmers sugar cane. Taking into account the areas of sugarcane in the state, the government should allow new sugar factories. In the period 1991 to 2007, the growth of the sugar factories is 42% before the 1970s decade, this growth was only 10.2%, but the area under sugar cane has not increased compared with the growth of sugar factories. The result on the provision of sufficient cane sugar. The government allowed 26 new sugar factories in 2000, of which 88% of the sugar factories of the path of progress. The machinery of the rest is rusting of the last six years. So what about the capital of the affected farmers who participate in these factories? In this regard, the Government of Maharashtra should think twice before giving permission for new sugar factories.

The Maharashtra government decided to liberalize and reduce its intervention in the pricing of sugarcane. The state government has assured farmers a fee of Rs 900 per T as the first installment of its products, while indicating Sugar mills can decide on subsequent payments. The decision comes after an uproar throughout the state for cane farmers in the month of November in protest against the remuneration for the cane. The Swabhimani Shetkari Sanghatana has decided to accept the price of Rs 1280 by T, while it has continued its agitation demanding Rs 2200 per T. Meanwhile, the Supreme Court has confirmed the ban on new sugar mills within 15 km radius of existing sugar mills under sugarcane (Control) Amendment) Regulations 2006.

In a major policy change that may improve recovery of prices for the sugar cane farmers across Maharashtra, the state government has decided to liberalize and reduce its intervention in the pricing policy. The government has assured the farmers a payment of 900 rupees per tonne first tranche of its production, while individual sugar factories may decide on subsequent payments

The Government of Maharashtra CACP Commission has suggested to establish a premium above the normal sugar in milk powder rich varieties to encourage farmers to grow sugar cane varieties. It argued for the suggestion that the state governments of North India attach importance the early and late varieties. This was opposed by a few sugar factories, because the same variety give different performance in different fields depending on input applied and different weather conditions and recovery at different time points. The Commission considered the proposal of Maharashtra and points view that unlike the north Indian states where state governments set the price of State reported regardless of the recovery rate, skimmed milk powdered sugar is linked to the rate of recovery. With the increase in the rate of recovery, both the sugar mills and cane growers sugar gain equally. The gain of sugar mills through increased production, while sugar cane growers get increased SMP.

4. Problems before the Sugar Co-operatives in Maharashtra:

S Ugar cooperatives in India are an example perfect for a sweet dream collapsed. They have been the backbone of the sugar industry in India. Once upon a time they were raising money as a company run Shylock. But thanks to mismanagement and corruption, cooperatives are in their death bed now. Take the case of Maharashtra, the land of sugar cooperatives. Made up 95 percent of the total sugar produced in the state, with almost negligible presence in the state of the private sector.

• Mismanagement:

At that time, the extraction of cane sugar was so expensive that most farmers preferred to make brown sugar, resulting in an excess of brown sugar on the market. The cooperative changed this situation to assure farmers of outlets for their products at a reasonable price. The appearance Only the cooperative movement was a farmer with a small property is also given the same status as a shareholder. situation has changed over the years. What is sugar cooperatives sick now? According to Prakash Naiknavare, managing director, Maharashtra state sugar mills also Cooperative Federation Ltd. said: "A major problem facing the cooperative sugar sector management is unprofessional, lack of insight and lack of decision making process.

• Delay in decision making:

The decision has been delayed due to the high number of people involved in the process. Another question is to the whims of nature. The sugar industry is governed by big natural vagaries and the infamous sugar cycle of two consecutive years of surpluses from one year shortages. "Major problems facing the sugar industry today is overproduction – 10 lakh tonnes in 1950 to over 200 lakh tonnes at present. While sugar consumption is increasing at a steady rate of 4-5 percent annually, which does not coincide with increased production. As a result, sugar prices have been sliding this year. Within three months – January to March of this year – sugar prices crashed to Rs 1,800 and Rs 1300 per quintal.

• Problem of falling prices:

Today, the price of cane is more than the price of sugar, and this has never happened before. The impact of falling prices ultimately, to agricultural producers of sugar cane. Mills run into losses, the payment to farmers will be delayed. So planting cane and will cropping patterns will change. As a result, farmers will be forced to switch to other crops, causing a shortage of sugar.

• Export Policy:

In an attempt to rescue the sugar sector the government recently lifted the ban on exports and decided to create a buffer stock. But lifting the export ban came at a time when world prices had crashed. Thus, although export subsidies, sugar mills were unable to send goods to other countries at a competitive price. While sugar production has increased over the last decade, domestic sugar consumption has grown at a slower pace. This has led to the accumulation of stocks in the sugar factories that affected prices. One of the main reasons why the margins are low pressure. This is also true that the global sugar and therefore to prevent imports of low world prices, the government has a high protection tariff in place. This situation can be corrected if the government encourages exports. While India is the third largest sugar producer nation in the world, only is the seventh largest exporter of the product for fiscal 2005-06. India produces about 20 million tons of sugar and just export one million tonnes. The per capita consumption is 18 kg, well below 59, Brazil's largest sugar producer and exporter.

• Export subsidies:

The main reason why we are not able to exploit the export potential is produced mainly sugar crystal, which is not very global market demand. There is virtually no demand for our sugar. Many countries have begun to export raw sugar and then create their own refineries for processing. Therefore, we are unable to capture the export market. This year, the Maharashtra government announced an export subsidy of Rs 1,000 per tonne that is beyond the export subsidy of 1,350 rupees per quintal announced by the central government. The grant is for exports to 10 lakh tonnes.

• Sugar cane Availability:

Maharashtra, the largest producer of sugar in the country, faces a peculiar situation because of an estimated deficit of at least 30 percent of its sugarcane production and increased demand due to delay in crushing cane and reported higher state prices (SAP) in Uttar Pradesh. Sugar cane available for crushing season (2008-09) is estimated at about 530 lakh metric tonnes (LMT), compared with 761.74 in the previous season LMT

This was after two consecutive years of surplus sugar production sugar – in 2006-07, the cane was crushed LMT 798.49 to produce 909.47 lakh quintals of sugar, while cane crushed in 2007-08 LMT 761.74 had 909.76 lakh quintals given the sweetener. In fact, the Maharashtra government had gone to pay compensation for the cane crushed by a sum of Rs 25 crore in 2007-08, and Rs 131 crore last year. The state of the sugar cane producers, is believed to have been deterred by the long dry season of the monsoon, along with the power load frequent congestion, and had switched to crops such as soybeans. In addition, producers were tired of waiting for the mills to pick up his cane, or wait for compensation it was retained without crushing

5 Tips:

The problems of the sugar industry have been examined by the various committees and have suggested that the various suggestions. Some suggestions are:

1. Support price of sugarcane should be fixed so as to stabilize production sugar cane.
2. The experience is that the prices of gur and khandsari, not sugar, which determines the amount of area would be placed under harvesting sugar cane. In respect of any sustainable policy, gur and khandsari interests must be taken into account.
3. Another area to consider is increased corporatisation of the industry. Corporations have the financial power to integrate forward into alcohol, paper and all cogeneration facilities energy. This will help improve the profitability of the mills. Another advantage that companies can offer is to improve production processes export quality sugar. This will improve the competitive advantage of global Maharashtra.
4. To compensate for the losses suffered by producers of sugar factories, in view of the additional benefits obtained by cursing these varieties, should provide adequate incentives for producers. Should the cane price announcement made by the state government.
5. Export of raw sugar need careful consideration, since the EU is not accepting white sugar prefer low quality and refine their own white sugar from imported raw sugar.
6. Lack of optimum utilization of by-products need attention, because ions not only help reduce the cost of production but also improve the economic status of producers of sugar cane.
7. The cooperative sugar factories should pay more attention to career management, new management techniques, to produce by-products the co-generation projects, increase worker efficiency, control over corruption, increasing competitiveness in the market, away from politics, etc. instant decision

Conclusion:

Undoubtedly, the cooperative sugar mills have played an important role in the development of rural Maharashtra, but the sugar industry last two decades of cooperation is facing various problems. If these are not resolved in time, the very existence of the sugar industry would be in danger in the future.

References: -

1. DR Gadgil, sugar cooperatives in Maharashtra, Published by the National Federation of Sugar Factories Ltd.
2. RV Sinha, India's Sugar Industry deep and profound publication, New Delhi, 1998.
3. Swami and Gupta, Rural Development and Cooperation, Ramesh Book Depot, Jaipur.
4. Report Maharashtra State Cooperative Sugar Federation 2007.
5. http://www.coopsugar.org
6. http://www.mahasugarfed.org
7. http://www.vsisugar.com
8. http://www.mahasugarfed.org

About the Author

Mr. Kumbhar Vijay Maruti
(M.A.NET, SET, GDC&A, DIT)
Dept. of Economics & Business economics,
A.M.A & N C, S College, Rajapur
Dist – Ratnagiri State- Maharashtra
PIN 416 702
Vijay5.2007@rediffmail.com, Vijay.kumbhar9@gmail.com
Cell No. 09860176059

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