Govt cleared a proposal to give Rs6,000 crore interest-free loans to sugar factories
Mumbai: On 10 June, Maharashtra’s cooperative minister Chandrakant Patil tersely told a delegation of the Maharashtra Cooperative Sugar Factories Ltd. which is also known as Sakhar Sangh — a lobby group of cooperative sugar factories — that, “state government will not give any subsidy to sugar cooperatives; sugar production is just like any other business and you should learn to take both risks and rewards in your stride."
The delegation was led by former deputy chief minister and Sakhar Sangh’s chairman Vijaysinh Mohite-Patil and it included other political heavyweights like deputy chief minister Ajit Pawar, former speaker of the state assembly Dilip Walse-Patil and former finance minister Jayant Patil. The delegation wanted ₹ 2,000 crore subsidy from the government so that they can give the fair and remunerative price (FRP) of ₹ 26,500 per tonne declared by the government.
However, the next day, the central cabinet cleared a proposal to give ₹ 6,000 crore interest-free loans to sugar factories — both private and cooperative — so that they can pay their dues of farmers.
According to the farmers’ organization Swabhimani Shetkari Sanghatana, sugar factories in Maharashtra owe around ₹ 3,400 crore to sugarcane growers for the crushing season of 2014-15. The crushing season in Maharashtra begins in October and lasts till March.
There are around 170 sugar factories in Maharashtra, out of which 110 are in the cooperative sector and they are mostly controlled by Congress and Nationalist Congress Party (NCP) leaders. A senior state government official from the cooperative department said, “Back of the envelope calculation tells us that Maharashtra will get around ₹ 1,850 crore from central government’s ₹ 6,000 crore bailout package."
Barring a few senior Bharatiya Janata Party (BJP) leaders such as agriculture minister Eknath Khadse, rural development minister Pankaja Munde, education minister Vinod Tawde and Union surface transport minister Nitin Gadkari, hardly any BJP or Shiv Sena legislators or members of Parliament are connected with the sugar industry.
This is a completely different picture to the one that was presented by the erstwhile Congress-NCP regime. In the Congress-NCP government of 2009-14, there were 12 ministers in the 30-member cabinet that either controlled cooperative sugar factories or owned private sugar factories or had interest in both.
After assuming power, the Devendra Fadnavis government slowly but surely started tightening the noose around the sugar industry by sending show-cause notices to sugar factories for their failure to give FRP to farmers, making implementation of drip irrigation for sugarcane cultivation mandatory and through various other measures.
But Prime Minister Narendra Modi’s government is more interested in being seen as a saviour of sugarcane farmers from Uttar Pradesh, the largest sugarcane producing state in the country. The BJP, which won 73 out of 80 Lok Sabha seats in the state, is hoping to return to power in the state after the gap of 13 years in the 2017 assembly elections. However in one stroke, unintentionally, the Modi government has changed the entire picture and has come out as a saviour of the sugar industry in Maharashtra.
Even if one accepts the fact that the motives of the Fadnavis government while tightening the noose around sugarcane were political, it would have brought a positive impact on Maharashtra’s ecology.
According to a 2005 World Bank report, barely 16% of the state’s cultivable land was under sugarcane but it consumed 70% of water which becomes available through irrigation. And in a state like Maharashtra, where more than one-third of the total area is drought-prone and where two-to-three years in any block of five years are of deficient monsoon, to have a water guzzling crop like sugarcane is always bad idea.
But in India, politics always takes precedence over economy and ecology. In the past, Congress and NCP politicians encouraged the sugar industry to expand and consolidate their political base. Now, the BJP is trying to do the same by trying to project itself as saviours of sugarcane farmers.
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