As the Enforcement Directorate investigates the alleged multi-crore cooperative sugar mill scam in Maharashtra, Cooperation Minister Balasaheb Patil has the tough task of defending his party, the NCP, and the state government. Patel denied allegations that the sale of sugar cooperatives to private entities at throwaway prices benefited politicians.
Excerpts from an exclusive interview:
Q. The ED has alleged that a scam involving cooperative sugar mills affected lakhs of farmers in Maharashtra. Your comments.
A. There is no scam involving cooperative sugar factories. Therefore, the question of farmers being affected does not arise. The issue relates to the sale of cooperative sugar mills under the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act 2002. [The mills] have defaulted on loans taken from the Maharashtra State Cooperative Bank and some district cooperative banks. So far, 36 mills have been sold by these banks or financial institutions. The SARFAESI Act empowers cooperative banks to sell such properties for loan recovery.
Q. Activist Anna Hazare has written to Union Cooperation Minister Amit Shah alleging a Rs25,000-crore scam involving cooperative sugar mills. Are you examining the allegation?
A. The alleged complaint, about the loss of Rs25,000 crore, may be with the Union cooperation minister. But no information or clarification has been sought from the state. The state government will share necessary information with the investigating authority as and when required. I am also planning to meet Anna Hazare soon and share all relevant information available with the state.
Q. A number of petitions filed in the Bombay High Court allege that farmers were cheated and cooperative sugar mills were sold at throwaway prices.
A. The accusations are baseless. As stated earlier, the mills have been sold by concerned financial institutions by following due procedure. In cases that were filed in this respect in the debts recovery tribunal and the High Court, no adverse decision was taken. As the matter is sub judice, I won’t comment more.
Q. The ED has alleged that some NCP leaders are involved.
A. I strongly deny the allegation. The matter is sub judice. I firmly believe that the said allegation will not stand in court.
Q. How true is the allegation that leaders of various political parties control the cooperatives, especially sugar mills, in Maharashtra?
A. The working of cooperative societies is regulated by statute—the Maharashtra Cooperative Societies Act—and the rules and bylaws framed under it. Even a separate statutory election authority, namely the State Cooperative Election Authority, was created under the act in 2013 to conduct elections in cooperatives in a fair and transparent manner.
The election of all cooperative societies in the state is conducted under the supervision of this independent authority. The SCEA recently conducted elections in 22,457 cooperative societies—21 of them district cooperative banks and another 21 cooperative sugar factories—without any blemish. The elections in cooperative societies are not contested under the banner of any political party. It cannot be said that sugar mills are controlled by political parties.
Q. Don’t you think that the sale of cooperative sugar mills to private entities is detrimental to the interests of farmers?
A. Sugar mills are sold by banks to recover overdue loans. The process is [governed by] the SARFAESI Act. Even those units that have been sold are helping farmers crush sugarcane and get FRP (fair and remunerative price) on time. The Sugarcane Control Order 1966 (which regulates production and sale) is applicable to private sugar mills as well. So the question of adverse impact on farmers does not arise.
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Q. How healthy is the state’s cooperative sector?
A. Sugarcane is processed to a large extent by cooperative sugar mills in Maharashtra. Farmers who supply cane receive timely remuneration in the form of FRP. Beside this, marketing [cooperative] societies play a crucial role in providing farmers agriculture inputs like seeds, fertilisers and pesticides at reasonable rates.
Cooperative sugar mills and dairy cooperatives have been a great source of direct and indirect employment. Cooperative consumer stores, which sell household goods at reasonable rates, play a significant role in the rural economy. The working capital of the cooperative sector in Maharashtra is Rs4,30,916 crore. The Maharashtra State Cooperative Bank, and 31 district central cooperative banks and 21,000 primary agricultural credit societies in rural areas, fulfil the financial needs of farmers. The cooperative sector has generated around four lakh jobs.
Q. What steps are you taking to help sick sugar mills?
A. To revive sick mills, the government has taken a policy decision to allow sick cooperative sugar mills and mills under liquidation to be operated on lease basis or partnership basis. So far 12 such mills have been [given the permit]. During the crushing season of 2021-22, these 12 mills [processed cane] to the tune of 25 lakh million tonnes. Nearly 4,500 jobs were created.
It is the government’s endeavour to promote and encourage cooperative sugar mills to undertake ethanol production, which will help them reduce losses. There are currently 77 ethanol plants in Maharashtra, with a capacity of 206 crore litres. The cooperative department has also fixed the staffing pattern of sugar mills to reduce the loss incurred because of huge administrative expenses.