THE farmers growing sugarcane for the Sanjivani Sahakari Sakhar Karkhana, the state’s only sugar factory, are agitated as they fear the factory might not be able to start its crushing on time. They withdrew their agitation only after the government gave an assurance to start crushing by December 5. The factory has been making losses for years but during the last financial year it recorded highest-ever loss at Rs 8.10 crore. It has been a problem-ridden factory all along. The factory attributes its immediate situation to several factors. A deal with an Aurangabad-based agency for import of sugarcane from outside the state turned into a scam. The other factor is shortage and cost of labour for harvesting sugarcane. The factory is beset with problems relating to machinery which is very old. The government has come to the aid of the factory with financial injection now and then. However, the factory has not been able to start running on its feet. It has accumulated losses of over Rs 50 crore over the years and is paying over Rs 50 lakh per year as interest of the accumulated loans.
The factory does not get all sugarcane from farmers of Goa. If it does not get sugarcane from other states it cannot operate to its full capacity. That would mean less sugar output and less income. Former managing director of the factory Umeshchandra Joshi decided to procure over a lakh tonnes of sugarcane from outside the state on an experimental basis. He signed a deal with an Aurangabad-based agency and paid it Rs 5 crore to supply the sugarcane together with 102 ‘tolis’ (labour gangs for harvesting) along with transport facility before the start of the crushing season. The agency did not deliver sugarcane, labour or transport. As the agency did not bring labour gangs, the Goan farmers had to hire labour at a high cost which the factory had to bear. Though the factory produced 58,336 quintals of sugar it ended up making loss of Rs 3.10 crore in addition to the Rs 5 crore lost to the Aurangabad-based agency.
The cost of production of sugar at the factory is very high. It has to sell its sugar at a high price in order to make a profit. There seems to be no redemption for the factory. Despite their knowledge that the factory was beset with technical problems, the authorities have done pretty little. Last year the factory developed technical problems just before the crushing season was to start. The main problem was with the turbine that powers the plant. Technical experts from Uttar Pradesh were called in to deal with the problems. Though last year the crushing season formally started on November 14, last year, it actually started weeks later, giving farmers anxious moments as cut cane loses weight as it dries up. The factory developed problems in February this year again and had to be shut down. The abject failure of the factory management and the concerned state government authorities to identify the basic problems the factory faces and to solve them could lead to its permanent closure. More than 3,500 farmers derive their livelihood from sugarcane. If the factory is closed it would bring economic misery to them.
The paralysis that has gripped the state administration owing to the prolonged illness of Chief Minister Manohar Parrikar has made the situation even more pathetic for the factory, leading to delay in the start of the crushing season. The government had sanctioned Rs 10 crore as share capital of the factory, which was to be released in instalments. The money from the government is for the share capital. So we are not sure how the factory can use it as its working capital. However, the sugarcane farmers are hoping that the government will give the factory Rs 10 crore which can help it meet the costs and pay the sugarcane farmers.
Ad-hoc and patchy works would not help the factory. It needs large investment for new machinery and technology. It needs good, competent and ethical board and chief executive. The factory continues to have frequent breakdowns. Breakdowns make the factory unviable. The factory needs a new avatar. It is up to its board and chief executive and the state government to see where they will get the finance. If the factory gets a reincarnation, it would inspire more farmers to grow sugarcane. The factory would cease to depend on other states for sugarcane. The existing farmers say they can double the sugarcane yield if the government provided steady flow of water. Sufficient sugarcane supply will help the factory operate to its capacity and produce more sugar at lower cost.