What is a sugar cooperative?
A
cooperative is a joint venture of producers formed to strengthen weaker people.
A cooperative mobilises natural, human and financial resources to achieve a
common goal. In the case of sugar, a cooperative pools the sugarcane produced
by its members, that is, farmers; processes it into sugar; sells the sugar;
pays back to its members the price that is realised, after deducting costs.
Functioning
of a sugar cooperative in India
The first
sugar cooperative factory in Maharashtra - Pravara Co-operative Sugar Factory -
was set up in 1950-51. The functioning of most cooperative units in India
(especially in Maharashtra, Gujarat and North Karnataka) has been broadly based
on the system of functioning and the features of the Pravara Co-operative Sugar
Factory (also called the ‘Pravaranagar Model').
The
features and the pattern of functioning of a sugar cooperative as per the
‘Pravaranagar Model' are as follows:
Linkage of
share with sugarcane acreage
The share
capital is allotted among the sugarcane growers on the basis of one share of Rs
1,000 corresponding to 1 acre of sugarcane cultivation. Initially, a
significant share of the share capital (3-4 times the farmer member's share)
was allotted to the state government along with the Central government.
According
to the cooperative system, each farmer member is given one vote, irrespective
of the number of shares held by the member (as opposed to a private company,
where each share held would be eligible for a vote).
Democratic
management
The member
shareholders elect the directors to represent them on the board of management
at regular intervals. The management is in the hands of farmer representatives,
and policy decisions are executed by professional managers.
Harvesting
and transport of sugarcane not left to the members
The sugar
factory undertakes the harvesting and transportation of the sugarcane on behalf
of the farmer member. Sugarcane is transported from the fields to the factory
through labour groups, contracted on behalf of the farmer members.
Payment of
uniform ex-field sugarcane returns
Every
sugarcane supplier is paid a uniform ex-field price. Harvesting and
transportation charges are combined and borne by all the farmer members.
Sugarcane
payment based on the working results of the sugar factory
The
payment system is based on the operational results. Total receipts from the
sale of sugar and co-products, less processing charges (such as salaries and
wages of factory workers; power, fuel and chemicals; and harvesting and
transport charges) is available for distribution among the sugarcane suppliers
on a pro-rata basis. The payment is usually made in 2-3 installments. The state
government's retain the power to fix sugarcane prices till their share capital
is fully refunded, and the government guarantees to term lending institutions
and others is outstanding.
Deduction
from the sugarcane price for various purposes
Over a
period of time, fixing of sugarcane prices evolved into a regular system. While
passing the residual amount to the growers, deductions made were towards
non-refundable and refundable deposits, area development fund, hutments for
poor, small savings scheme and miscellaneous contributions.
Socio-economic
development through the sugar factory
The effort
is on the socio-economic, educational and cultural development of the
surrounding area of the factory.
The
Pravara pattern has largely continued in Maharashtra, Gujarat and North
Karnataka. However, with changes in the ruling political parties, there have
been changes in the pattern of functioning of cooperative units in other
states, such as Uttar Pradesh, Punjab, Haryana, Rajasthan, Orissa and Kerala.
The working of a sugar factory is controlled by the state government. Sugarcane
prices are paid as per the state government's advice and not on the basis of
the working results of individual factories.
