The Hindu : Coop. Sugars failed farmers, workers

Online edition of India's National Newspaper
Tuesday, Dec 24, 2002

Southern States

Southern States - Kerala

Coop. Sugars failed farmers, workers

By G. Prabhakaran

PALAKKAD DEC. 23. Workers of the Chittur Co-operative Sugars Limited have been suffering for the last five years due to the financial and other crises faced by the unit. They have not been paid salary for the last six months. The company is also not paying their insurance, provident fund and gratuity instalments.

The company has to pay Rs. 3 crores to the farmers who supplied sugarcane for the last three years. When the company is to pay such a huge amount to farmers and workers it has a stock of sugar worth Rs. 6 crores. But it cannot be sold in the open market due to the sugar levy system imposed by the Union Government. It can release the stock as per the direction and price fixed by the Centre. The price of sugarcane is fixed by the State Government. Thus, the company has no control over its raw material and the final product.

The company fell into bad days when arrack was banned. It was producing arrack from molasses, a by-product of sugarcane grinding. When the arrack was banned the factory had to stop the production. Its attempts to get a license to produce Indian Made Foreign Liquor also failed. The Extra Neutral Alcohol produced by the factory has no buyers now due to its high price and various other reasons. The Government also did not insist the distilleries in the State to buy the alcohol from the factory.

The co-operative movement in sugarcane cultivation had worked wonders and made rich a large number of farmers in western Maharashtra and some other parts of the country. However, the Cooperative Sugars Limited started in Chittur in 1965 as an ambitious venture has, on the other hand, proved a failure. The factory has been running in heavy loss for the last many years, with the result that sugarcane cultivation in the area has shrunk from 7,000 acres to 2,000 acres.

Sugarcane farmers said a company that was formed to help the farmers completely had forgotten their cause. Instead, it concentrated on the distillery business since the early 1970s. However, because of a change of policy of the Government the spirit produced in the factory had no market.

Chittur and other areas of Palakkad had good potential to develop sugarcane. So the company was registered as a multi-unit cooperative society under the Central Government Act, extending the area of its pro-farmer operations to Coimbatore and Pollachi in Tamil Nadu. In fact, the factory had been established in the context of a desire expressed by farmers in Kerala and Tamil Nadu, who later became its shareholders.

But in the last 36 years of its operations, the aim and objectives of the company stand defeated.

Now the factory is in a pitiable position. It is neither a cooperative nor a company.

The farmers demanded the company take steps to develop sugarcane cultivation in areas around 25 km of the factory. Unless enough sugarcane was available it could not be run profitably. The failure of the successive Governments to find a development scheme and mismanagement led to the present crisis in the industry, they alleged.

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