Maharashtra government to offer counter-guarantees for sugar factory loans

The Maharashtra government plans to offer counter guarantees to the tune of Rs300 crore for the pre-season and short-term loans of 34 non-functional co-operative sugar factories in the state during the 2010-11 crushing season starting from 1October, to ensure all available sugarcane is crushed.

Harshvardhan Patil, state minister for co-operation, disclosed this while addressing a news conference in Pune yesterday.

The sugarcane availability for the fresh crushing season is expected to touch 752.15 lakh tonnes which will yield 86.50 lakh tonnes of sugar in the 2010-11 crushing season.

The state government had recently held a meeting in Mumbai, under Patil's chairmanship, to discuss issues of sugarcane and the sugar industry.

The decision to offer a counter guarantee for the loans was taken at the meeting and on Tuesday the minister held another meeting with the managements of non-functional sugar factories in Pune.

In the 2009-10 crushing season, the sugar output of the state was 71.05 lakh tonnes which was much higher than the initial 48 lakh tonnes estimate given by the state federation of co-operative sugar factories.

Addressing the news conference Patil said the proposals of 28 non-functional sugar factories had been cleared and the remaining six factories would be cleared by the evening.

The factories would be able to avail pre-season loans and short-tern loans from the state co-operative bank or district central co-operative banks, for which the state government would offer a counter guarantee.

He added that Rs300 crore would be disbursed immediately to the factories which are supposed to start crushing from 1October.

Only those factories with functioning machinery, but that were closed for the past couple of seasons due either to management issues or funding problems had been selected by the government he said.

"With these 34 sugar factories, the state will have a total of 130 co-operative sugar factories and 38 private sugar factories that will crush sugarcane in the next season. No factory will be allowed to stop crushing, till all the sugarcane available in its jurisdiction is crushed," Patil said.

The 2009-10 season saw a shortage of labour for harvesting sugarcane. Patil said, "After a successful demonstration of mechanised harvesters at sugarcane fields, sugar factories in the state have ordered 84 harvesters, which will be used to harvest sugarcane.

As the labour sector is unorganised, the factory is not sure of getting the required labour at the right time. The factories will provide harvesters which will work more efficiently."

The government has hiked labour charges by 19 per cent from Rs111 per tonne of cane to Rs133 per tonne with the charges for labour also revised by 19 per cent to ensure that the state's labour force remained in the state.

He said that of the 9 lakh labourer, 15 per cent move out to other states due to better payment.

source: domain-b