CHAPTER
SUGARCANE PRICING POLICY IN
III
MAHARASHTRA
CO-OPERATIVE AND PRIVATE SUGAR FACTORIES
3.1 INTRODUCTION:
We have already seen that, sugar industry is a major consumer goods industry in India. It is based on sugarcane crop, which is subject to the vagaries of mansoon.
The area under sugarcane in India increased from 2.5 million hectares in 1968-69 to 3.7 million hectares in 1991-92, production also rose from 124.6 million tonnes to 249.25 million tonnes and the sugarcane yield from 49.8 tonnes to 67.8 tonnes per hectare during the same period.*
3.2DEVEL0PMENT OF THE SUGAR INDUSTRY:
The first sugar factory in India was established in the year 1784 at Sooksugar, which was privately owned.
This factory was started by a cultivator, Croftes. This was followed by starting the second sugar factory in 1791 in Bihar by L.T. Patterson2. In 1930-31 there were in total 29 sugar factories operating in India. All were established in Private sector.
12425
41After 1930s, the industry had been provided the protection through the Tariff Board. Since then the industry expanded rapidly. Before independence, the sugar industry in India was mostly established in the private or joint stock sector. Only one co-operative sugar factory was existing in Andhra Pradesh at Etikoppaka in Vishakhapattanam district. There were in total 140 sugar units in the country during 1947.
After independence sugar factories are increas ing eye site mark in our country and particularly in co-operative sector.
The development of sugar factories in India since independence is as shown in the following table 3.1.
Table No. 3.1: Number of Sugar Factories In Operation Year Total No. Of Co-operative
Sugar Factories
No. Of Total Sugar Factories
1950-51 02 139
1960-61 30 174
1970-71 73 215
1980-81 149 315
1981-82 153 320
1982-83 156 321
1983-84 160 326
1984-85 178 339
1985-86 186 342
1986-87 194 354
1987-88 196 357
1988-89 203 365
1989-90 212 377
1990-91 220 385
1991-92 224 392
1992-93 232 416
Source: Co-operative sugar, vol-24, No.10, June-1993, P.532.
Table 3.1 shows that, the sugar industry is rapidly growing in India since independence. National level total output of sugar has contributed to the level of 62.4 percent by co-operative sugar mills. The co-operative sugar enterprises have grown up rapidly since independence.
3.3 SHARE OF MAHARASHTRA IN INDIAN SUGAR SCENARIO:
Maharashtra plays a dominant role in Indian sugar scenario. The state is located in the tropical area where sugar recovery is more than 10 percent. In Maharashtra the sugar industry is developing fast, because of the fevourable climatic condition for growing sugarcane crop, and better recovery of sugar from sugarcane.
Table 3.2 shows the importance and the place of Maharashtra in India’s sugar industry.
Table No. 3.2: Percentage Share of Maharashtra In Indian Sugar Industry
Year irea of Sugarcane
Yield of Sugarcane
Crushing of Sugarcane
Production of Sugar
Sugar leccotery
Mo. of Sugar Factorieu
image Crutbing
day*
1950-51 6.45 6.56 9.52 2.0Y 112.82 10.97 115.84
19(0-11 6.42 10.13 14.43 17.27 119.61 15.52 99.40
1970-11 8.30 11.69 24.48 28.21 150.00 18.99 119.76
1990-91 9.60 15.29 38.60 40.51 110.92 24.52 140.00
1981-82 9.30 15.44 32.43 35.87 110.56 24.45 117.34
1989-90 11.14 15.08 32.94 35.70 108.29 25.46 126.58
1990-91 12.05 (5.99 31.30 34.19 109.33 25.19 116.26
1991-92 M.4. N.i. 28.13 31.43 111.68 25.25 108.68
Source: Godaua, October - (993 PP.16,
43
3.4 DEVELOPMENT OF SUGAR INDUSTRY IN MAHARASHTRA:
Sugar industry in Maharashtra is developing very fast, because of the three main reasons noted below.
1) Fevourable climatic condition for growing sugarcane crop.
2) Progress of co-operative sector in general.
3) Government protection and political influence.
There are seven regions of sugar factories in Maharashtra.
1) Kolhapur region It covers the Kolhapur and Sangli dis
trict.
2) Pune Region In this region Satara, Pune and Solapur districts are included.
3) Ahmadnagar Region:- This includes Ahmadnagar and Nasik districts.
4) Aurangabad Region:- In this region Dhule, Jalgaon, Aurangabad, Jalana, Beed districts are included.
5) Nanded Region:- Parbhani, Nanded, Osmanabad and Latur districts are included in this region.
6) Amaraoti Region:- It covers the Buldhana, Yeotmal, Akola and Amaraoti districts.
7) Nagpur Region:- In this region Wardha, Nagpur and Bhandara districts are included^.
In Maharashtra there is no single sugar factory established in public sector. All sugar factories in Maharashtra are either established in co-operative sector
and private or joint unit sector. Co-operative sector is dominating in the state.
The first factory in the state was established in 1919 in private sector. Which was started by the British Company at Haregaon in Ahmednagar district. The Walchandna- gar Industries Limited established its Valchandnagar Sugar Farm in the year 1930 and started its own sugar factory. In 1930 the Government of India appointed the Tariff Commission to examine the needs of protection to the sugar industry.
The Commission recommended production and protection for a period of 14 years to sugar industry. Besides, Government of India adopted a favourable policy and provided incentive to the industry. As a result, till the end of the Second World War, 12 sugar factories were established in private sector in Maharashtra. These sugar factories have developed their own sugarcane farms4.
Since 1947 no efforts were made to organise a co-operative sugar factory in the old Bombay State. However
/
in Maharashtra, the first co-operative sugar factory was established at Pravaranagar in 1948, by Vithalro Eknathrao Vikhe-Patil, who was the first chairman of this sugar factory. It was a very good beginning of co-operative sugar factories in Maharashtra State4. Now in Maharashtra there are 110 co-operative sugar factories in operation and about 27 proposals are seeking permission from the
45
Central Government.
Sugar increasing in private sector operative set up.
factories in Maharashtra are rapidly their performance, because of which sugar factories are converted into co-
Table 3.3: Shows the Progress Of Sugar Industry In Maharashtra.
Table 3.3: Progress of Sugar Industry in Maharashtra.
fear Total Do. of Sugar FactoriOf
irea Dnder Sugarcane (ia Lakh
loot.)
Sugarcane field ia lakh tonaei
Crushing of Sagaroaae
in lakh tonnes
Prodactioi of augur
ia lakl tonnei
Perceatage of Sugar Eecoverj
Average Crushing
days
1950-51 15 0.65 45.39 16.62 0.12 11.62 117
(100) (100) (100) (100) (100) (100) (100)
1960-61 2T 1.55 120.89 44.99 5.23 11.65 166
(180) (238) (266) (423) (4358) (100.26) (142)
1970-Tt 41 2.1! 14T.70 63.53 10.55 11.25 164
(2T3) (334) (325) (881) (8792) (96.12) (140)
1910-11 Tf 2.56 235.91 188.83 20.85 11.07 147
(513) (394) (520) (17T8) (17375) (95.26) (126)
1990-91 9T 4.44 384.16 382.84 41.19 19.76 193
(84T) (683) (846) (3605) (34325) (92.60) (165)
1991-92 99 l.i. N.i. 3T7.00 42.23 11.19 188
(660) (3450) (35108) (96.30) (161)
Source - Godava, October-1993 PP.Ho.16.
Note - figures in the bracket shows the increase or decrease
Table 3.3 shows the Maharashtra. But since 1980’s
progress of sugar industry the sugar factories are f
in
the problems of inadequate supply of sugarcane. The per hectare yield of sugarcane is deciing in the state. Farmers are taking interest in other crops since no remunerative prices are paid for their sugarcane by the sugar factories.
So the sickness in this industry is of recent origin.
Acute shortage of sugarcane used by two consecu
tive years of drought coupled with financial constraints faced by most of the co-operative sugar factories (105) has thrown the sugar industry in Maharashtra on the throes of a severe crisis. According to the industry sources, cane production in Ahmednagar, Nasik and Dhule districts in Marathada and Vidarbha regions fell sick to SO percent of the earlier average production®.
Increase in interest rates on the borrowing of sugar factories and higher rates paid for sugarcane to their members and due to shortage of sugarcane, some sugar factories brought sugarcane from outside their area which led to inverse ratio of expenditure and percentage of sugar recovery. Against this backdrop the start of crushing season 1991-92 by nine new co-operative sugar factories and the on going erection of 27 others, have caught the industry in a dilemma. The number of sick sugar factories would touch 70 from the present 40 at the end of the current crushing season 1992-93®.
47
3.5 PROCESS OF SUGARCANE PRICE FIXATION IN MAHARASHTRA STATE:
An interesting point to be noted here in case of Maharashtra is that there is no state advised sugarcane price. The State Government itself determines different sugarcane prices for all co-operative sugar factories.
The power of fixing the sugarcane price payable by all co-operative sugar factories in the state is given to the State Government by virtue of the provision in the, by-laws of the co-operative sugar factories. Every year the State Government fixes the sugarcane price payable by all co-operative sugar factories except those who have repaid the Government share capital and paid fully the term loans and such other loans for which the State Government is the guarantor.
t
As a result, in Maharashtra State the market
I
forces of demand and supply of sugarcane has very little?
role to play in affecting the sugarcane price payable by co-operative sugar factories. According to Dr. W.C. Shri- shrimal in the co-operative sector the mechanism for determining sugarcane price to be actually paid, does not depend on market forces of supply and demand but on certain other considerations7.
In co-operative sugar factories sugarcane price is nothing but distribution of surplus over and above all expenses to sugarcane suppliers in proportion to sugarcane
\
supplied by them.
Before 1979-80 different prices of sugarcane were being fixed for different co-operative set up and different rates for members and non members of co-operative set up.
After 1980-81 the State Government has decided to pay equal prices of sugarcane for members and non-members of co-operative organisation. Co-operative sugar factories are providing some incentives to its members like good fertilis
ers, better seeds, insecticides, loan for transport vehicles to the members etc, these facilities are not available to the non-members of a co-operative sugar factories.
The sugarcane prices are paid in two or three instalments. The prices are fixed after the close of the crushing season of a sugar factory. The proposals of paying final bills to cane growers are placed by the Director of Sugar and State Federation of Sugar Co-operatives before a Ministerial Committee headed by the Chief Minister, which lays down broad guidelines. On the basis of the guidelines, the final cane prices are decided by the Directorate of Sugar, (Government of Maharashtra.) in consultation with the
individual sugar factory.
49
3.6 SUGARCANE PRICE AS AN ADVANCE PAYABLE BY THE CO-OPERATIVE SUGAR FACTORIES IN MAHARASHTRA:
In Maharashtra the sugar factories are grouped on the basis of their location viz.
1) High Recovery Zone:- Those sugar factories which are located in southern districts of Maharashtra comprising Satara, Sangli and Kolhapur districts, where the sugar recovery is highest, by 11 percent and above.
2) Medium Recovery Zone:- Those sugar factories which are located in central districts of Maharashtra comprising of Pune, Solapur, Ahmednagar and Nashik where sugar recovery is medium between 10.25 percent to 10.99 percent.
3) Low Recovery Zone:- Those sugar factories which are located in the Vidarbha, Marathwada and Khandesh districts, where sugar recovery is lowest, below 10.25 percent.
Generally the advance of sugarcane price permitted to the sugar factories is the same, because of the steady growth and to avoid unhealthy competition between co-operative sugar factories.
The price of sugarcane fixation in Maharashtra for the co-operative sugar factories is done by the State Government as per the provision of the by-laws of these factories. The sugarcane price is thus decided for the crushing season ended after the closure of season. Experi-
ence shows that the sugarcane price of the season is normally finalised by the Directorate of Sugar under the guidelines of Ministerial Committee. Every year this Committee guides the Directorate of Sugar. The Directorate of sugar finalise the final sugarcane price when factories submit their necessary information to the Directorate of Sugar. The Directorate of sugar, tabulate the data, and prepare necessary proposal and submit the same to the State Government. This advance price is fixed by the State Government every year well in advance before the start of the season.
3.7 NORMS OF FIXING THE SUGARCANE PRICES FOR THE CO-OPERATIVE SUGAR FACTORIES IN MAHARASHTRA:
There are two types of sugarcane prices fixed by the State Government viz.
1) Ex-field and 2) Ex-gate.
1) Ex-field Price:- Ex-field price of sugarcane means the prices of sugarcane crop in the field. In this type the responsibility of cutting and transportation of sugarcane from field to factory rest on the sugar factory. Generally the co-operative sugar factories in Maharashtra accepted the ex-field price of sugarcane.
2) Ex-gate price:- Ex-gate price of sugarcane means factory gate prices. In this type of prices the responsibility of
51
cutting and transportation is on the sugarcane growers, to carry the sugarcane from field to factory gate. Last year the Supreme Court had declared Rs.740 per tonne as a sugarcane price for the non-members of the sugar factory.
This price is ex-gate price of sugarcane. In Maharashtra only 10 sugar factories, viz - Warana, Hutatma Kisan Ahir, Sanjivani, Rajaram Bapu Patil, Vasantdada, Vithal, Kumbhi Kasari, Majalgaon, Kannad and Sahyadri etc. have accepted this sugarcane price. All other factories have given a memoranda to the Directorate of Sugar, that it is impossible to give Rs.740.00 per tonne as sugarcane price for the non
members of a sugar factory.
Every year after the closure of the crushing season the Director of Sugar called off the information on various points accompanied with general necessary data. The following points are generally considered while fixing the price of sugarcane in the co-operative sugar factories in Maharashtra.
1) Sugarcane crushed by the factory.
2) Total sugar production.
3) Recovery of sugar.
4) Sale of sugar.
5) Stock of sugar.
6) Levy prices of sugar.
7) Open market (stock) sugar prices.
8) Concessions under Samphat Committee Report.
9) Cost against ratoon crop (Khodaki).
10) Bonus.
11) Education Fund.
12) Aduit fee.
13) Subscriptions of State Federation.
14) Diferred salary payments.
15) Diferred cost of harvest and transport of sugarcane.
16) Depreciation.
17) Loss if any etc8.
While fixing the sugarcane price of the co-operative sugar factories, the following principles are generally observed.
1) The minimum sugarcane price for the state is fixed for the season. No factory can pay less than the minimum price fixed by the state.
2) The sugar factory newly established or old well estab- 1ished.
3) Prices of other co-operative sugar factories which are located in the vicinity.
If any other sugar factory permit payment of substantially higher price than the other neighbouring factories, it should not pay more than a particular amount in cash as a sugarcane price. The component of sugarcane price over and above this maximum limit payable in cash was
decided to be kept as fixed deposit with the sugar factories so as to build up the reserves of the factories.
If a co-operative sugar factory deserve to pay for Khodava (ratoon) crop it has to seek permission from the Ministerial Committee headed by Chief Minister. They have to send the proposal to Ministerial Committee for seeking the payment of Khodava (ratoon) rate to be paid to its members of the sugar factory. This is not applicable to the non
members of the sugar factory.
Shri Shankar Sahakari Sakhar Karkhana Ltd., Sadashivnagar, has paid the Khodava rates to its members as shown in table No 3.4.
Table 3.4: Kodava Rates.
Season Khodava Rate Rs. Per tonne
1981-82 03
1982-83 07
1983-84 07
1984-85 07
1985-86 07
1986-87 07
1987-88 10
1988-89 10
1989-90 15
1990-91 15
1991-92 15
1992-93 25
Source - Annual Reports of the factory.
The Khadava Rates are increasing continuously. The rate has been extended by Rs.25 per tonne in 1992-93.
3.8 DEDUCTIONS FROM SUGARCANE PRICES BY THE CO-OPERATIVE SUGAR FACTORIES:
The co-operative sugar factories have created various kinds of funds to be collected from the cane suppliers. These deductions from the sugarcane price are meant for the development of sugar factory and socio
economic development of the region. These deductions are either backed by the provisions in the by-laws of the factory or by the decision of the Ministerial Committee, while fixing the final sugarcane price of the co-operative sugar factories. Every year by its resolution, the general body of a co-operative sugar factory can resolve to deduct the sugarcane price. Shri. Shankar Sahakari Sakhar Karkhana Ltd. Sadashivnagar has deducted the following types of deductions from time to time during the period from 1981-82
to 1992-93.
1) Non-Refundab1e Deposits (N.R.D.).
2) Fixed Deposits (Gate cane).
3) Chief Minister’s Fund.
4) House/Dweling Unit Scheme.
5) Area Development Fund.
6) Sugarcane Development Fund.
7) Chief Minister’s Drought Relief.
8) Flood Affected Rehabilitation Fund.
9) Drinking Water Scheme for Drought Affected Area.
55
10) Slum fund.
11) Earth Quack Fund etc.
Further other deductions includes, 12) Small savig.
13) Contribution for Late - Shankarrao Hohite Pratisthan.
14) Contribution for Late - Shankarrao Mohite Smrutimandir.
15) Contribution for Late - Yeshwantrao Chavan Pratisthan.
16) Five Year’s Fixed Deposit.
17) Two Year’s Fixed Deposit.
18) Expansion Deposit.
19) Distillary Deposit.
20) Contribution for Late - Kale Maharaj Smaraknidhi®.
The details of the deductions are shown in the table 3.5.
Table 3.5 shows that the deductions are very high and these deductions are made from the sugarcane prices paid
to members and non-members of the sugar factory.
The final sugarcane prices paid by the co
operative sugar factories in Maharashtra is illustrated in Table No. 3.6.
Table 3.5: Various Deductions of Co-operative Sugar Faetoy Per Tonne (In Rs.)
Sr.
So.
Tears
Item 1981-
1982 1982- 1983
1983- 1984
1984- 1985
1985- 1986
1986- 1987
1987- 1988
1988- 1989
1989- 1990
1990- 1991
1991- 1992
1992- 1993 I. Hot Refundable Deposits 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 2. Chief Minister’s Fund 00.50 00.50 00.50 00.50 00.50 00.50 00.50 01.00 01.00 01.00 01.00 3. Tine Deposits (Gate Cane) 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 16.00 4. Bouse/Dveling Dnit Scheie - 00.50 00.50 00.50 00.50 00.50 00.50 00.50 00.50 00.50 00.50 - 5. Sugarcane Developnent Fund - - - 04.00 03.00 04.00 04.00 04.00 04.00 04.00 04.00 04.00 8. Area Developnent Fund - - - - - - - - 01.00 02.00 01.00 01.00 7. Drinking Mater Scbene For
Drought Affected Area
- - - - - - - - - - 00.30 -
8. Flood Affected Rehabilitation Fund - - - - - - - 02.00 - 01.00 - - 9. Garth Quack Fund - - - - - - - - - - - 02.00 10. Chief Minister’s Drought Relief
Other Deductions
• — 02.00 ” — “ “
1. Short Deposits - 01.00 01.00 01.00 01.00 01.00 01.00 01.00 01.00 01.00 01.00 01.00 2. 5 years Fired Deposits - - - 16.00 - - - - 18.50 - - - 3. Expansion Deposits - - - - - - 05.00 05.00 10.00 - 10.00 - 4. Distillery Deposits - - - - - - - - - 20.00 10.00 20.00 5. Late Kale Maharajiaaaraknidhi - - - - - 00.25 - - - - - - 6. 2 Tears Fired Deposits - - - - - - 16.00 - - - - - 7. Late Shankarrao Mohite Pratisthan 00. so - - - - - - - - - - 8. Late Shankarrao Mohite Snrutinandir - 01.00 01.00 - - - - - - - - - 9. Late Teshsantrao Chavan Partishthan - - - 01.00 - - - - - - - - Total 20.50 23.00 23.00 43.00 25.00 28.25 47.00 33.00 56.00 49.50 47.10 49.00 Source: Annual Reports
57
Table 3.6: Final Sugarcane Price Paid by The Factories (Amount in Rs.)
Sr.
So.
Sue Of The Factor; 1 Addreea Cap.
(TCD)
1987-88 1988-89 1989-90 1990-91 1991-92 1992-93
1 2 3 4 5 6 7 8 9
1.
KQLliPOB REGION I0LSLP0I DISTRICT
BBOGAHATI SSt LTD 4000 400.00 402.00 490.00 434.00 439.00 667.00 2. CBBATBAPATI SALABLE SSI LTD 2200 360.00 401.00 405.00 405.00 437.00 600.00 3. CHHLTBLPiTI SHLBD SSI LTD 1250 390.00 404.00 458.00 466.00 490.00 876.00 4. D4TT1 SSI LTD 1250 385.00 364.00 3T0.00 417.50 426.00 869.00 5. DLHL SIETILBI SSI LTD 5000 405.00 405.00 410.00 410.00 435.00 686.00 6. DAOLAT SBETIABI SSI LTD 3500 368.00 406.00 461.00 461.00 501.00 T05.00 7. DODBOLSGA VEDGASGA SSI LTD 3500 345.00 350.00 401.00 357.50 392.80 648.00 8. GADBISGLAL SSI LTD 2000 353.00 395.00 490.00 465.00 510.00 702.50 4 9. JAVAHAB SSI LTD 2500 000.00 000.00 000.00
_niinPfi HFPTTfilL080.00 000.00 000.00
to.
10SBHI IASABI SSI LTD 3000 382.00 401.00VRVbB
465.00
tfBbV LVR
450.00 435.00 670.00 11. SHB1 PASCBGASGA SSI LTD 5000 405.00 405.00 490.00 460.00 486.00 676.00 12. IABASA SSI LTD 4000 419.00 442.00 475.00 435.00 450.00 700.00
13.
SASGLI DISBTICT
HDTATSA IISAS AH1B SSI LTD 1250 425.00 475.00 620.00 530.00 475.00 703.00 14. SABASIALI SSI LTD 1250 340.00 396.00 495.00 495.00 450.00 675.00 15. HAWAMGA SSI LTD 1250 290.00 325.00 370.50 405.00 410.00 500.00 16. SALABLE BAPD PATIL SSI LTD 4000 427.00 466.00 525.00 460.00 400.00 S.A.
LIT. TASGAOS SSI LTD 2750 000.00 000.00
nu 000.00
>EB EBEC 475.00
000.00
Mil
000.00 000.00 18. VASASTDADA SBETIABI SSI LTD 5000 365.00 391.00
l tVR
449.00 446.80 679.00 19. VISBIAS SSI LTD 1250 341.00 348.00 450.00 427.50 416.00 679.00 20. YASBIAST SSI LTD 1250 336.00 395.00 494.00 492.00 427.00 540.00
Coiitd....
1 2 3 4 5 1 7 8 9
pone REGION SATARA DISTRICT
21. BiUSIBEB BESII SSK LTD 1250 377.00 386.00 465.00 408.00 413.00 626.00 22. IRISHNA SSI LTD 5000 371.00 381.00 511.50 440.00 400.00 711.00 23. SAHYADRI SSI LTD 5000 399.00 405.00 465.00 470.00 450.00 625.00 24. &JINIYAT4R1 SSI LTD 2500 415.00 425.00 525.00 436.50 426.80 620.00 25. SATARA SSI LTD 2000 352.00 401.00 440.00 440.00 421.00 575.00 26. SBRIRAN SSI LTD
PONE DISTRICT
2000 240.00 240.00 250.00 260.00 296.80 540.00
27. BBIHA SSI LTD 2500 344.00 328.00 343.00 300.00 337.00 511.00 28. INDAPUR SSI LTD (A) 1750 000.00
—ONDEl 000.00 ERECTIl
000.00
1
307.00 361.80 525.00 29. HiJGAD SSI LTD (A) 2500 000.00) 000.00) 000.00) 000.00- - - UNDER ERECTION
306.80 440.00 30. SBRI CHHATRAPATI SSI LTD 1800 353.00 361.00 385.50 461.50 460.80 613.00 31. SHRI SOtfESBiAR SSI LTD 2500 324.00 320.00 371.50 351.00 296.80 450.00 32. sbri vighnabar
ssi
ltd 1250 000.00 310.00 350.00 427.50 485.00 575.00 33. THE MALEGAON SSI LTD 2500 390.00 320.00 451.00 461.50 441.00 621.00 34. YASHIANT SSI LTDSOLAPOR DISTRICT
2500 336.00 395.00 494.00 492.00 427.00 556.00
35. BHIMA SSI LTD 1250 344.00 328.00 343.00 300.00 337.00 544.00 38. BBOGAVATI SSI LTD 1250 000.00 252.00 276.00 312.50 306.80 667.00 37. SHRI PANDURANG SSI LTD 1300 000.00
--- IAS
000.00 DNDER PI
000.00 T. SECT!
000.00 R---
351.80 460.00 38. SBRI SANT DAMAJI SSI LTD (A) 2500 000.00 000.00 000.00) 000.00
-UNDER ERECTION
000.00 000.00 39. SHRI SHANIAR SSI LTD 1250 318.00 345.00 421.00 380.00 379.80 496.00,,
s’’ U i'4 ,
4}X2*
1 2 3 4 5 6 7 8 9 40. SERI SIDDSESHKifi SSI LTD 2000 355.00 414.00 414.00 380.00 361.00 425.00 41. SIBI VITTHiL SSI LTD 3500 335.00 365.00 425.00 427.00 400.00 577.00 42. S.I.S.IOBITE PITH SSI LTD 4500 319.00 346.00 461.00 377.00 370.00 490.00
IBIEDUGIB REGION IBEDIiGIR DISTRICT
443. IGiSTI SSI LTD 2500 000.00 000.00 900.00
ngncD c 000.00
FfTfflN
000.00 000.00 44. ISEM SSI LTD 2600 260.00 142.00 375.00
l&V l IUR
410.00 369.00 I.I.
45. DR.7.7IIHE PITIL SSI LTD 4000 295.00 285.00 310.00 360.00 375.00 I.I.
46. GIIESI SSI LTD 1750 240.00 000.00 315.00 325.00 340.00 I.I.
47. IOPIMIOH SSI LTD 2200 345.00 335.00 380.00 400.00 I.I. I.I.
48. IBli SSI LTD 2000 290.00 283.00 361.00 303.00 401.00 I.I.
49. PIRIEB TILDU SSI LTD 1250 000.00 269.00 306.50 325.00 330.00 429.09 50. SiEGIEMEB BUG SSI LTD 3500 360.00 375.00 425.00 400.00 420.00 I.I.
51. SIBI DBYIBESHViR SSI LTD 3000 325.00 325.00 381100 391.00 425.00 645.00 52. SIBI JIGDIKBI SSI LTD 0800 240.00 273.00 330.00 307.50 326.80 425.00 53. SIBI YBIDIESIVII SSI LTD 0800 001.00 257.00 290.00 305.00 355.00 I.I.
54. TEE BilOBI SSI LTD 4250 278.50 267.00 306.75 305.00 350.00 N.I.
55. THE SIIJIVIII SSI LTD 2100 350.00 340.00 390.00 410.00 300.00 I.I.
56. TIE S1BIG0I6I SSI LTD 2000 306.00 306.00 353.00 395.00 390.00 525.00 USII DISBTICT
57. l.I.IIGI SSI LTD 1250 300.00 335.00 376.50 3T5.00 351.80 474.00 58. USII SSI LTD 1250 240.00 242.00 300.00 299.00 310.80 I.I.
59. TIE GIBU SSI LTD 1500 261.00
... , 300.00
• 301.00 275.00 296.80 I.I.
80. TIE IIDVi SSI LTD 1250 280.00 312.00 372.00 372.00 389.00 586.00
Contd.,.,
i 2 3 4 5 6 7 8 9
61. TIE IIPHAD 881 ITD 3560 349.00 200.00 201.06 275.00 296.80 637.00 62. ViSiMTRiO BiDi PAUL SSI LTD 1250 302.00 .325.00 376.50 382.56 330.00 456.00
AOBAMGABAD REGION DHOLE DISTBICT
13. SHIBP0I SSI LTD 2500 101.00 321.00 357.00 351.00 355.00 401.00 64. SH8I PANZA8AUH SSI LTD 1250 244.00 242.00 300.00 275.00 326.80 396.06 65. SHBI SATPUDA TAPI P. SSI LTD 5000 383.00 300.00 425.00 430.50 430.10 516.00 66. THE SAHJAY SSI LTD (B) 1250 240.00 242.00 275.00 290.00 000.00 006.00
JALGAOH DISTRICT
67. BELGANGA SSI LTD 2500 272.00 300.00 325.00 332.50 336.88 418.00 68. MADHDIAB SSI LTD 2500 279.00 253.00 308.06 356.00 385.00 471.00 69. VASANT SSI LTD 1250 260.00 280.00 291.60 275.00 306.80 380.00
AORANGABAD DISTRICT
TO. DEOGIBI SSI LTD (A) 2500 006.06 000.00 090*00
nuncD v\ 0M*00
RfTTffll—
000.00 600.00 71. GAHGAPOB SSI LTD 2000 271.00 265.00 325.60 350.00 361.80 500.06 72. IANNAD SSI LTD 1258 266.00 300.00 343.00 307.50 320.00 410.60 73. SEBI SAIT EIEATE SSI LTD 1250 240.00 242.00 306.00 307.50 325.80 388.00 74. THE SIDDEESHIAB SSI LTD 2600 314.00 321.00 375.00 419.00 375.00 500.00 75. VIMATAK SSI LTD 1250 006.00 242.06 325.00 3(8.50 337.80 318.00
JALANi DISBTICT
76. JALANA SSI LTD 1250 273.60 325.00 362.00 430.00 430.00 491.00 77. SAHABTE SSI LTD 1250 284.00 268.00 326.00 350.00 375.00 400.00
Coitd,...
61
I 2 3 4 5 6 T 8 9
T8.
BEED BISTBICT
ARBAJOGAI 881 LTD (i) 1250 2T1.00 2T5.00 300.00 29T.50 306.80 000.60 T9. jai bhavari ssi ltd 1256 261.00 332.00 355.00 309.50 339.80 006.00 SO. IADA SSI LTD 1250 240.00 242.00 300.00 SOT.50 306.80 000.00 81. RAJALGAOR SSI LTD (1) 2500 060.00 000.60 000.00 000.00 000.00 000.00 82. SHRI GAJARAR SSI LTD (B) 1250 255.00 282.60
-ORDER E 2T1.00
ECTIOfl
321.00 306.00 000.00
83.
N&NDED REGION PIBBIANI DISTRICT
GODAVARI DDBRANA SSI LTD 1256 240.00 242.00 300.00 350.60 368.00 460.00 84. RARATBAVADA SSI LTD 1250 240.00 242.00 265.00 2T5.00 306.10 310.00 85. PURRA SSI LTD 2560 286.00 313.00 329.00 30T.50 3T5.00 4T5.00
86.
NAMDED DISTRICT
GODAVARI RAHAI SS LTD 1250 240.00 242.00 310.00 350.60 356.80 400.00 BBT. IALARBAR VIBHAG SSI LTD 1250 000.00 006.00 000.00 000.00 060.00 000.00 88. SIARIAR SSI LTD 1250 000.00 212.00 305.00 359.00 365.00 44T.00
19.
OSRARABAD DISTRICT
SRRI TtlLJA BHAVANI SSI LTD 1250 210.00 320.00 365.00 514.00 426.00 423.00 90. TERRA S1ETIARI SSI LTD 3506 240.00 29T.00 303.00 325.00 321.80 400.00
91.
LATDR DISTRICT
JAI JAVAN JAI KISAN SSI LTD 1250 240.00 ' 265.00 312.00 330.00 3TI.00 426.00 92. RANJARA SSI LTD 1250 269.06 315.00 410.00 522.00 525.00 590.60 93. SHETIARI SSI LTD 1250 266.00 283.00 325.00 340.00 34T.00 R.A.
Coitd....
t
- >
1 2 3 4 5 8 T 8 9
B94.
1KIRA0TI REGION BQLDflilA DISttlCT
J1J1M1T1 831 LTD 1250 240.00 240.00 250.00 280.00 296.80 N.i.
195.
YE0TM1L DIST1ICT
JAI IISAN SSI LTD 2580 000.08 800.00 080.00 008.08 000.00 080.00 98. YiSUT SSI LTD 1250 288.80 284.00
-ORDER Ei 298.50
ICTI0N
2T5.00 346.00 383.80
9T.
11GL1 DISTRICT
BiLAjI SSI LTB 1250 240.00 242.00 281.58 80?.00 318.00 375.00
98.
1I1R10T1 DISTRICT
S1ETI1II SSI LTD (1) 1250 268.00 283.00 325.08 340.00 34T.00 000.00
99.
I1GP0R REGION VilDBl DISTRICT
NlIiTSi SSI LTD 1250 240.00 242.08 250.00 275.00 296.88 318.00
108.
MiGPDR DISTRICT
S1RIR1N SSI LTD 1258 282.00 301.00 408.00 350.00 358.00 090.08
101.
BBiNDlRi DISTRICT
N1ING1NG1 SSI LTD 1250 240.80 240.00 250.00 260.00 296.80 000.00
Source - Consolidated information of the co-operative sugar factories of Maharashtra. (As on 31/12/1993)
Note : A : UNDER ERECTION (From 1987-88 to 1990-91)/
1991-92/1992-93.
B : NOT IN OPERATION (during season 1992-93)
Cane Prices in respect of rest of the factories are yet to be fixed
63
The table 3.6 illustrates the zonewise/district- wise and factorywise classification of the sugarcane prices paid by each sugar factory for the period from 1987-88 to 1992-93. In which we find an increasing trend of sugarcane prices since 1987-88. Particularly in the Kolhapur and Sangli region sugar factories have paid higher prices for the sugarcane.
3.9 PRICING POLICY IN PRIVATE SUGAR FACTORIES IN MAHARASHTRA:
It is already stated that, the first sugar factory was established in private sector both in India and in Maharashtra also. In the state of Maharashtra the first
sugar factory was established in 1919 in private sector.
Since 1947 all sugar factories were established in private sector. In Maharashtra 14 sugar factories were established in private sector upto 1947. These sugar factories were not just to be a manufacturing and profit making sugar factories but a nucleous of a 1 round development of the region.
Since independence, the co-operative sector is developing very fast. The successful development of co-operative sector, sugar factories motivated some private sugar factories to convert into co-operative sugar facto
ries. No new sugar factories have been established in
private sector. At present there are only 4 sugar factories operating in private sector in Maharashtra.
Sugar factories in private sector were dominating earlier in the state of Maharashtra. But now only four sugar factories are operating in this sector. The information relating to the sugarcane pricing in private sector is not available in written form. No detailed study about sugarcane pricing policy in private sector has been made by anybody.
So essential references were not available. As a result the researcher has visited various officials, working in private sugar factory and had oral discussion with them. It should
j
be noted here that the explanation given by the officials j about sugarcane pricing in private sector was inadequate and
I
not sufficient.
Generally when the price of sugarcane is fixed in ^ private sector following points are generally taken into i cosideration.
The central Government fixes the statutory minimum prices every year and are made applicable to every sugar factory in the beginning of the crushing season. These prices are dependent on the percentage of recovery. The statutory minimum prices are ex-gate prices.
Except these minimum sugarcane prices, under schulede 5A the factory must pay the additional cane price
65
as per the Bhargava Formula.
In Bhargava formula the amount *R’ roffers to, i) the actual amount realised during the sugar year and
ii) the estimated value of the unsold stocks of sugar held at the end of 30th September, calculated in regard to free sugar stocks at the average rate of sales made during the 16th to 30th September and in regard to levy sugar stocks at the notified levy prices as on the 30th September.
The Bhargava formula is essentially a device for equal sharing of extra realisation from sale of free sugar, between the factory on one side and the cane growers on the otherside. This formula in its simplified form can be stated as,
R - L
X = ---
2C
X = Additional cane price R = Actual realisation L = Unit cost
C = Crushing.
If i) Q be the total quantity of sugar produced by the factory in quintals and
ii) r be the percent recovery of sugar from sugarcane, then
Q =
r X C 100
or C = 100
Q
C
Substituting the value of C in (2) we get
200Q (R-L) =
200
R
Q" Rs. per quintal
or
X = ----r 20
R L
Q - Rs. per M.T.
R/Q = is the average realisation from sale of one quintal of sugar and
L/Q » is unit cost of sugar per quintal.
Central Government fixes the statewise unit cost by considering the cost of production.
The value of L/Q and R/Q along with the corre
sponding values of r would then give us the additional cane price which when added to minimum cane price would yield the total price per M.T. of cane payable^.
These additional cane price are paid to cane growers by private sugar factories. But in actual practice in the case of private sugar factories. Board of Directors fixes their cane prices in the meeting considering cost of production and as per the norms of Bureau of Industrial Costs and Prices (BICP).
67
It is obligatory to pay cane price as per the Central Government rule. However the sugar factory .in Maharashtra State pay higher sugarcane price which is because of their cost of cultivation.
Private sugar factories fixes its cane prices more than the statutory minimum sugarcane price. The Board of Directors take care that their price is generally similar to co-operative sugar factories which are operating in the same area. But it is not obligatory to fix the price similar to co-operative sector. The prices are similar to co
operative sector because of adequate supply of sugarcane to the factory. If there is a difference in sugarcane price, the sugarcane growers will not supply their sugarcane to the private sugar factories. So the care is taken by the Board of Director to fix the price similar to co-operative sugar factory.
3.10 CONCLUSIONS:
It means private sugar factories are paying reasonable cane prices taking into account the working capital would not get affected. But they are indirectly compelled to pay similar price that the co-operative sugar factories pays.
In case of co-operative sugarfactories, some times sugarcane prices are fixed under the presser of political issues. If prices are paid more than the working capital of the sugar factories, they get affected. As a result, some sugar factories in Maharashtra are facing the problem of short margin on working capital.
It would best to pay the sugarcane price as per cost of cultivation. But in actual practice lot of other reasons except cost of cultivation are affecting the sugarcane prices. In the factories where the Board of Director is efficient, there the prices of sugarcane are paid satisfactorily. To protect and maintain the interests of the canegrowers is one of the obligatory function of the sugar factories. Otherwise the industry will not get the raw-material properly and reguleriy.
REFERENCES
*
1) Co-operative sugar, Novermber-December 1993, Vol.25, No.3 and 4, P. 109.
2) Noel Deer Op. Cit, p.54/ R.M.Kharche, (1989): Sugar Co
ops In Developing Economy; Published by Anant Dashrathe Parimal Prakashan Khadkeshwar, Aurangabad - 431001.p.ll 3) Consolidated information of the co-perative sugar
factories of Maharashtra as on 31-12-93.
69
4) R.M.Kharche (1989) Sugar Co-ops in Developing Economy;
Published by Anant Dashrathe Parimal Prakashan Khad- keshwar, Aurangabad - 431001.p.17,91
5) Co-operative Sugar, Dec-1992 - Jan-1993. Vol-24, No 4
& 5, p. 156 6) Ibid
7) R.M. Kharche, Op. Cit.
8) From the record of Directorate of Sugar, Maharashtra State, Pune.
9) Office records.
10) K.K.Misra, (1985): Sickness in Indian Sugar Industry, Published by Suneja Publishing Corporation, B4/29 Safdarjang Evalave, New-Delhi - 110029.
APPENDIX - I
Outward No/Sugarcane rate/
2093/139/Divi-7/finance-2 Director of Sugar,
Maharashtra State, Pune-42 Date:-
To,
The Managing Director,
Sub Final rate for sugarcane the crushing of (year)
Sir,
In accordance with the by-laws of your factory and considering the recommendations of the Director of Sugar, Maharashtra State Co-Operative Sugar Mills Association, and as per the resolutions passed in the meeting of Ministerial Committee Sugarcane rate fixed (ex-field) for your factory
is Rs.____________________ in words ___________________________
_________________________ per tonne for the crushing year
2. The following aspects are taken into account, in the meeting of the Ministerial Committee, while fixing this rate.
2(i). Sales of Sugar:- In the year i.e from Apri1 1, ____
to March 31 _________ .
2(i i ) . Balance Sugar Quantity:- The cost of Balance sugar quantity by the end of 31st March ______ in respect of levy
71
sugar, available for open sale, excluding the Central Excise tax, is fixed as follows:
a) The cost of the balance sugar quantity controlled (levy) sugar, is in accordance with the cost, fixed by the Cental Government.
b) For the open quota, per bag of one quintal Rs. _____ is thought of.
c) The balance, out of the deceived extra quota, as per the
’Sampat Scheme’ is calculated as cited above.
2(iii> . Sampat Concessions:- As per the recommendations of the Sampat Committee, the extra income earned from the concessions, granted to the sugar factories, is to be utilised only for the repayment of loans taken for the capital expenses. Accordinly, sugar factories are expected to reserve the same for the repayment of loans. As per the suggestions made by the Sugar Federation, Maharashtra State and as per the system approved by the Govt., the additional income earned from the Sampat concessions, is taken into account and the sugar factory is to deposit (unrefundable) that much amount. The additional income in (year) earned from the Sampat concessions, is to be utilised as construct
ed below:
Details Amount in lakh Rs.
Rate per M.T.
(A) Total income from the concessions granted by the Sampat Committee.
(i) Extra income actually received.
(i i) Difference in (value) the balance quota.
CB) Utilization of the above cited amount.
(i) (ii) (Hi)
To make up losses.
To repay loans taken for capital expenses.
To received the deposit (un-refundable) in lien of transport of sugarcane.
Total
There is no need to utilize the additional income, received from the concessions of the Sampat Committee to Curtail further the unrefundable deposits, if the rate of interest of the financial institutions, is more than the rate of interest on the unrefundable deposits, deducted from the total bills. However, the factories have to take caution that the amount utilized to make up losses, is to be compensated from the unrefundable deposits.
(3) Arrangements to be made as per the sub-clause, of the co-operative laws/rules/decisions of the Ministerial commit
tee .
73
Details of the Arrangement Arrangements made in lakhs
3.1 Expenses for Khodaki and Vechani IRs. __Per M.T.l for member/non-member.
3.2 Bonus .... X.
3.3 Educational funds as per the Act of co-operative,for the state co-operative Education Fund.
3.4 Auditors fees.
3.5 Contribution to Maharashtra State Sugar Federation.
3.6 For Salaries.
3.7 Funds for harvesting and transport of sugarcane.
3.8 Depreciation charges in year.
3.9 For other Expenses.
3.10 To make up previous losses.
3.11 V.S.I. subscription.
(Vasantdada Sugar Institute)
'
Total
Note - Permission/consent is granted to allow the factory for the expenses of Rs. ______ lakhs as Khodaki expenses.
4. Arrangements thought of/considered taken into account.
4.1 Provision of the interest on levy gurantee, being court matter, is excluded from the expenses.
4.2 As per the suggestion of the Ministerial Committee, that
t
at least 1/8*-*1 loss be made up, to enable your factory to compensate the loss, an amount of Rs.______ lakhs, is made available for your factory.
4.3 Depreciation amount of Rs. lakhs, out of the total depreciation of Rs. 1akhs, in (year), is not considered while fixing the final rate.
5. Deductions to be made from the sugar cane bills.
5.1 As per the arrangements in the by-laws of the factory and the condition of the financial institutions and by K.W.
No.2.3 of the Sampat Committee the unrefundable deposits are to be deducted.
5.2 As per the Ministerial Committee’s recommendations for (year), crushing season, the maximum rate for cash payment is fixed at Rs.______ per M.T. The amount, more than Rs. ______ per M.T. is to be deposited refundable into the factory, for a period of 5 years after making all other deductions. The factory has to pay interest on their deposits, interest, as per the provisions made.
5.3 In case of non-members while giving the same rate to them, refundable deposits for the period of 10 years, are to be taken at the rate of interest for non-refundable depos
its .
5.4 The factory has to deduct from the sugarcane bills considering the above suggestions.
75
Details of Deductions to be made from the sugarcane bills.
Rate of deductions from the bill Rate per M.T.
Dodos its
1. By-law deductioins as per the condition of financial
institutions.
(a) Unrefundable Deposits from the members.
(b) Refundable Deposits from the non-members. •
2. Unrefundable Deposit from the Extra income f^om the Sampat Concessions.
3. Expansion/Distillery Deposit (Refundable Deposit).
4. Deposit, as per the
resolution of Ministerial Committee meeting dated...
for
years with interest
refundable deposit (surplus) 1 to 4 Total
5. The factory has to pay 15% rate of interest on the deposits mentioned in 4.
Deduct ion Rs.
1. Sugarcane Development fund Rs. oer M.T.
2. Chief Minister’s Fund Rs. Der M.T.
3. Small Scale savings Rs. Der M.T.
4. Earth quake fund Rs. Der M.T.
5. Fund for the development Rs. per M.T.
of an area
6. Funds for the Educational Rs. per M.T.
institutions /trusts founded by the factory
7. Other Rs. per M.T.
(medical trusts)
1 to 7 Total Rs. =
Note -
1. No other deduction be made other than these, No deduction be made in respect of State Agriculture Maha Mandal and Govt. Schools.
5.1 The rate of cash payment is Rs._____ after above cited deductions are made.
5.2 As per the resolution passed in the meeting dated________ the ministerial committee, a sugar factory has to pay cash amount of Rs.______after making the deductions.
The factory is suggested to pay this installment at its earliest, considering its financial condition.
6. Factories have to remit the following amounts to the respective officers immediately - within a month.
77
7.1 Indira Awas Yojana - Balance
credit amount. Rs.
Total. Rs.
7.2 Small Savings-Balance.
credit amount. Rs.
Total. Rs.
7.3 Chief minister fund - balance.
credit amount. Rs.
Total. Rs.
7.4 Earth quake fund by this order. Rs.
7.5 Flood fund - by this order. Rs.
7.6 Subscription - Deccan sugar
institute Balance. Rs,
Total. Rs.
7.7 Education Fund of Balance. Rs.
Maharashtra State co-operative.
By this order. Rs.
Total. Rs.
7.8 Subscription-State Balance. Rs.
co-operative sugar mills federation.
By this order. Rs.
Total. Rs.
7.9 Factories should remit for the loans from the Govt./Financial Institutions up to __/__/ 199 1. Overdue loans of financial
institutions.
2. Govt.’s share of capital.
3. Sugarcane purchase tax loan.
4. Rehabitation/project - expenses/1oss.
5. Other Govt - Loans.
6. Sugarcane purchase tax. :
The factories have to remit this form - refund- able/non-refundable deposits and from Rs.______reserved per bag. The bank has to send report by 5tl1 every month.
8. The difference between the rate already paid and final rate is to be paid to the sugarcane producers considering the loans to be paid by each producer as well as deductions, the amount for the completion of the incomplete work of the factory. The amount to be paid to the producers be paid without, further delay. Considering the arrangements of
"Sugarcane control order".
9. While making payments to the producess, for the crushing season (year) - loans taken from the co-operative by the producer, be deducted as per the Govt, circular. If the producer owes any thing else to the factory, it may be deducted.
10. The sugar factories are instructed to complete their accounts and to send their reports to this office upto __/__/199 . They are further informed to report the under
signed about the implementation of the conditions and suggestions in this order, within 15 days.
Director of Sugar, Maharashtra State, Pune - 42
With Permission of
Your’s faithfully.
Deputy Director, (Finance)
Maharashtra State-Pune-42
79
