Raiding Sugar Daddy

THE Shiv Sena-BJP combine has pulled out all stops to break into the sugar lobby, the Congress' most powerful base in Maharashtra, taking the fight right to the enemy camp. If the move succeeds—for starters, the government has initiated steps that challenge power structures and erodes the finances of sugar cooperatives, and is wooing dissidents—it could make things difficult for Sharad Pawar and Co. Sugar-rich western Maharashtra, a region which sends the largest number of legislators to the assembly, has helped the Congress retain power in Maharashtra for over 40 years.

Last fortnight, the Supreme Court stayed an amendment by the state government that lifts the zoning of sugarcane and allows farmers to sell cane to factories outside their zones. The Congress-run Maharashtra Rajya Sahakari Sakhar Karkhana Sangh had appealed against the amendment, freeing the movement of cane. Such a move hits the sugar barons directly—mainly Congressmen—and the cooperative movement they have controlled since the first sugar cooperative was established in Maharashtra's Ahmednagar district in the early 1950s.

 "This will lead to utter chaos, besides crippling smaller cooperatives. Farmers will sell to factories that give them the best price while smaller ones will find it difficult to survive," says Vijaysinh Mohite Patil, a former minister and sugar federation chairman. Countering charges that the government's steps were designed to wreck the movement, state cooperatives minister J. Mundada says: "We have not affected the cooperative movement and the small farmer; we have affected the monopoly of those controlling the cooperatives. It's the sugar barons of the Congress who are shouting."

Congressmen complain of harassment and allege that multi-faceted measures are being used to strangle the party's hold over the cooperatives and these are ultimately derailing a carefully nurtured movement. Among them is the charge that budget allocations for this sector are diverted to the BJP and Shiv Sena-run sugar factories.

 "Ultimately, the cooperative movement cannot survive without government support. They are hitting at the sugar industry. And they are trying to break the mass base of the Congress by hitting at the cooperative movement," says Dilip Valse Patil, a legislator close to Pawar. Successive Congress governments have pampered the sugar cooperatives and faced charges that funds and infrastructure have been diverted from other regions leaving them backward while western Maharashtra flourished.

The sugar lobby and this region, which has 75 seats in the 288-member assembly, has in turn consistently kept the Congress in power. Pawar, who is touring the state, has warned the government that there would be mass agitations over efforts to break the cooperative movement with moves like de-zoning.

But the state government has already put in place measures to check Congress influence like appointing administrators in some of the factories, and changing the voting pattern in the cooperatives. Buttonholing irregularities has become a bit of a hobby horse for the government. Last month, the police issued summons to Shankarrao Kolhe, a sugar baron and former minister. Kolhe, who is close to Pawar, was accused of forging documents of the Godavari milk producers' cooperative. Kolhe's group had lost control of the cooperative. His rivals, who now control the cooperative, lodged the police complaint charging him with forgery and attempts to thwart them. "They are always doing something irregular. In fact their functioning is full of irregularities which needs to be checked," says minister Mundada commenting on the action against a senior party leader Kolhe which has angered the Congress.

Electorally, the government's efforts at denting Congress bases have reached Pawar's doorstep. The setbacks for Pawar on home turf include defeat in the Malegaon sugar factory election and more recently in gram panchayat polls, when 23 of 31 village panchayats in Baramati (Pawar's constituency) voted for the BJP. This has left the sugar industry and the Congress on the defensive.

One effort by the sugar cooperatives federation has been to challenge government decisions in court and to draw attention to the needs of the industry. Among the sugar industry's complaints against the government is the ban on exporting alcohol and molasses to other states. Neighbouring Karnataka pays Rs 19 to Rs 20 per litre of alcohol while the local rate is Rs 13 to Rs 14. Transport subsidies and other financial backing which Congress governments offered are also not forthcoming. The sugar cooperatives, which have been carrying forward a Rs 300 crore loss sustained in 1995, are reeling under financial constraints, and a number of them have been unable to pay workers. Recently, the state government directed the sugar factories—39 of them have wage arrears totalling Rs 60 crore—to pay the workers. "That's very nice, asking the factories to pay the workers. But where do they get the money from after making losses?" asks Mohite Patil.

The sugar federation has drafted the industry's demands and presented them both to the state and central governments. These include a state-level machinery on the lines of BIFR to rehabilitate sick sugar factories, incentives to all expansion projects, concessional financing, and levies on imported sugar to bring parity in pricing with the local industry which is paying excise duty of Rs 85 a quintal.

Unfavourable weather, an unfriendly government and financial trouble are giving the sugar business a bad time. Out of 165 sugar factories—115 are working and 50 are coming up—26 are sick, and another 28 are in a precarious position. For years sugar has placed Maharashtra ahead of other states. Maharashtra's sugar cooperatives account for 60 per cent of the production of the cooperative sector in India. The area under sugarcane in the state during 1995-96 was as much as 5.8 lakh hectares. But due to factors like the failure of monsoons the area under cane has come down to 4.65 lakh hectares in 1997-98. And production has slipped from 54 lakh tonnes in '95-96 to 34 lakh tonnes in '96-97, to a current low of 28 lakh tonnes for '97-98. Congressmen are using the downslide to support their accusations that the sugar industry is being harassed by the Sena-BJP government. "We were number one with 40 per cent of the national production. Now it is steadily going down under them," says MPCC chief Ranjeet Deshmukh.

The cracks were largely evident in the party's most powerful base during the assembly polls two years ago. Across the state, nearly 200 rebel candidates stood against the official nominees. Former minister, local district chiefs and sitting MLAs who were denied tickets stood as Independents and succeeded in pushing the Congress out of office. An unprecedented number, 40, were elected and another 54 were directly responsible for the defeat of the party's official candidates. In western Maharashtra, 22 rebels got elected and succeeded in bringing down the Congress tally of seats to 35 out of 75. The sugar belt had returned 54 Congress MLAs to the assembly in 1990. Those disgruntled with the Congress allowed the BJP-Sena a toehold here in 1995. In the Lok Sabha polls, the saffron allies backed Congress rebels, a number of them sugar barons. An unusual combination of all parties supported Shankarrao Patil in Baramati in his fight against Pawar.

Two years after the polls, the alliance government has managed some defections too. Radhakrishna Vikhe Patil switched to the Sena and has been made a minister. He is the son of Balasaheb Vikhe Patil, who represented Kopargaon in the sugar belt five times in the Lok Sabha. The Vikhe Patil family established the state's first sugar cooperative in Ahmednagar in early 1950. Shalinitai Patil, a former minister and wife of Maratha strongman Vasantrao Patil, has also switched to the Sena. She has a sugar factory in the family home base, Sangli. The BJP won over Uday Raje Bhosle of the erstwhile royal family of Satara. Ahmednagar with 14 sugar cooperatives—the highest in the state—Kopargaon, Satara and Sangli are key seats in the sugar belt. If the Congress wants to return, it would first have to protect its sugar base.