Cooperative sugar turning bitter in AP

It may be noted that during the Chandrababu regime, the number of cooperative sugar factories has come down from 18 to 10. But the number of sugar factories under private managements has gone up from seven to 17. The Congress government after coming to power in 2004 concentrated on seven cooperative sugar factories and five of them earned profits

• Sugar cooperatives in a dismal state in Andhra Pradesh
• No farmers representative on expert panel set up by govt
• AP govt does not announce State advisory price
• It should also pay subsidy as extended by KCP Sugar
• Factories generating power and making use of by-products make good products
• AP govt should ensure this at all cooperative factories

The Andhra Pradesh government has recently appointed a four-member expert committee to study the problems faced by the sugar sector and to recommend suggestions to rejuvenate it.

However, except one member, the other three members are representatives of sugar factory managements. There is not a single representative from the farmers community.

The AP government has been grossly neglecting the cooperative sugar factories, which is detrimental to the interests of sugarcane farmers. Almost all the state governments in the country announce state advisory sugarcane price (SAP) every year. However, the AP government pays only purchase tax of Rs 60 per tonne to the farmers, which is paltry. The sugarcane price is Rs 2,500 to Rs 3,000 per tonne in other States, whereas it is only between Rs 2,100 and Rs 2,500 in AP. It is high time the State government implemented the SAP for sugarcane after duly announcing it in the larger interests of farmers.

KCP sugar factory pays Rs 10,000 for grownup sugarcane and Rs 6,000 for early stage crop per acre as subsidy to the sugarcane farmers. The State government should follow that example. Moreover, the crop cutting and transport has become burdensome to the farmer. The sugar factory managements in Maharashtra and Karnataka bear the cutting and transport charges much to the relief of farmers there. The same could be implemented in AP also.

Before 1960, there used to be South Indian Sugar Mills Association (SISMA) formula according to which 60 per cent of the profits would go to farmers and 40 per cent to the managements. However, the farmers launched massive agitations throughout the country when that formula was not implemented properly. The Centre appointed Bhargav Commission which suggested that sugarcane price should be fixed depending on 8.5 per cent recovery and additional price on additional recovery. It also suggested that the additional income over free sale of sugar and profits in the use of by-products should also be passed on to the farmers. These recommendations were in force till 2005.

However, the UPA government took some drastic decisions which were detrimental to the farmers. Agriculture Minister Sharad Pawar had taken some decisions in favour of the Mumbai sugar lobby. Following hue and cry over this, the then Prime Minister Manmohan Singh appointed Rangarajan Committee to redress the grievances. However, the recommendations of Rangarajan Committee were also against the interests of farmers.

A number of committees made it clear that the factories which are using by-products from sugarcane including molasses, bagasse, filtercane are making enormous profits. Power is being generated from bagasse at throwaway cost. However, only two cooperative sugar factories are generating power. Power plants could be established in other factories also.

Some factories are producing ethanol, alcohol and some chemicals from molasses. In fact, this is the major income source for the AP Beverages Corporation. The private factories which have their own distilleries are making sizable profits. However, not a single cooperative factory has its own distillery.

The AP government should take initiative to establish a distillery at Anakapalli for the sugar factories in Visakhapatnam and Vizianagaram districts and another distillery for the factories in Chittoor, Nellore and Guntur districts.

Bio-fertiliser is being manufactured from another by-product filtercane. The percentage of mixing ethanol with petrol has gone up to ten per cent from five per cent, which is also welcomed by one and all. If the cooperative factories concentrated on by-products, there would be huge profits and the farmers could be given good price for sugarcane.

The sugarcane is a major crop in 10 States in the country which are producing surplus sugar. Still for reasons better known to the powers-that-be, India is importing sugar from other countries like Brazil. Due to the imports, the sugar stocks are remaining in godowns, resulting in falling prices. It is high time the farmers launched a strong movement to counter the government moves, keeping in view their livelihood.

A glance at the cooperative sugar factories reveals that the first cooperative sugar factory was established in Bihar and the second one was set up in Etikoppaka in Visakhapatnam district in 1933. By 1980s, as many as 19 sugar factories were established in cooperative sector in Andhra Pradesh. Incidentally, it may be noted that the KCP sugar factory was also once in cooperative sector. During the regime of the then Chief Minister N T Rama Rao, 14 cooperative sugar factories were making profits. The successive governments appointed nominated bodies to the cooperative sugar factories which resulted in their downtrend.

N Chandrababu Naidu after coming to power for the second time in 1999 scrupulously followed the instructions of Adam Smith, consultant of World Bank, to privatise the cooperative sugar factories. Some of the sugar factories were outright handed over to the private managements at throwaway price. Sugar factories at Amudalavalasa, Palacole and Gurajala were closed down. It may be noted that during the Chandrababu regime, the number of cooperative sugar factories has come down from 18 to 10. But the number of sugar factories under private managements has gone up from seven to 17.

The Congress government after coming to power in 2004 concentrated on seven cooperative sugar factories and five of them earned profits. The Chodavaram Cooperative Sugars Limited in Visakhapatnam which is also known as Govada sugar factory with 23,500 member-farmers is the largest in the State and the second largest in the country. Cooperative sugar factories play a vital role in sugarcane development in the state.

Of the 529 factories in the country, 252 factories are in the cooperative sector while 67 are in government sector. Noticeably, there are some cooperative sugar factories which crush 10,000 tonnes of sugarcane per day.

(Author is the Secretary of Andhra Pradesh Sugarcane Farmers Association)