For several mills, the production cost comes up to R3,200 per quintal and they end up selling sugar for R2,300 per quintal.

Union agriculture minister Sharad Pawar has advised Maharashtra sugar mills to take their production cost into account before deciding on the first instalment of cane payments.

“For several mills, the production cost comes up to R3,200 per quintal and they end up selling sugar for R2,300 per quintal. While making the first cane payment to farmers, many of these mills fall into debt. How are they going to sustain themselves?” he asked. “Some politicians hold demonstrations asking for higher prices. What does one do with the cane? Who is to bear the cost in case of a delay in crushing?”, he said in an oblique reference to last year’s agitation by farmers seeking higher first cane payments.

Pawar was speaking at the inauguration of a 13-MW capacity cogeneration plant of Bhimashankar Sahakari Sakhar Karkhana, headed by Dilip Walse Patil, Vidhan Sabha speaker at Manchar taluka near Pune. Pawar was of the opinion that in future, mills will not only have to make sugar but also by-products such as ethanol and electricity to sustain themselves. “5% blending of petrol with ethanol has been made mandatory by the government and will end up in reduced emissions. Therefore, mills should focus on by-products like ethanol for more revenue. Selling sugar is also becoming a major challenge. Raw sugar is preferred in overseas markets and, therefore, if mills wish to export, they will need to make raw sugar instead of offering the finished product,” he said.

Ruing the lack of coordination between shareholders and management of mills, Pawar pointed out that out of the 250-odd mills in the state, around 50% were not doing well due to a lack of coordination between stakeholders and the management. He said mills could take a lesson from the Bhimashankar sugar factory, which will make an extra annual income of R27 crore after the establishment of the cogen plant. The mill had earlier set up a 6-MW cogen plant, taking total output to 19 MW.

Earlier, Devdatta Nikam, chairman of Bhimashankar cooperative sugar factory, said that farmers in the district have demanded 10 hours of power supply during the day. “The ground water level in Punjab was eight feet below the surface before the state government started providing free power to farmers. The level there has now dipped to more than 150 feet due to excessive drawing of ground water.