The new sugar barons

It each started connected September 7, 1998 — conscionable a week aft the sweetener manufacture was de-licenced — erstwhile Thombare obtained an IEM (industrial entrepreneur memorandum) to found a mill astatine Ranjani colony successful Kalamb taluka of past Osmanabad district. That mill, which could crush 1,250 tonnes of cane per time (tcd), was commissioned connected February 29, 2000.

Sugarcane workplace successful Parbani successful Maharsahtra (Express Photo by Amit Chakravarty)

Today, too this mill that tin crush 5,000 tcd, Thombare’s institution owns different 2,500-tcd mill astatine Gunj-Sawana successful Mahagaon taluka of Maharashtra’s Yavatmal district. In the past 2023-24 season, the 2 mills unneurotic crushed 14.94 lakh tonnes (lt) of cane procured from immoderate 22,000 farmers.

Thombare is portion of a cardinal displacement successful Maharashtra’s sweetener scenery — from a authorities wherever practically lone cooperative mills were allowed to run to 1 that’s importantly controlled by backstage barons, galore of them bigger than Thombare. In 2023-24, 104 retired of Maharashtra’s 207 operational mills were private. They crushed 46.5 per cent of the state’s cane and produced implicit 44 per cent of its sugar. That’s a acold outcry from 25 years agone — successful 1998-99, determination were simply 3 backstage factories which unneurotic produced conscionable 2.3% of Maharashtra’s full sugar.

With Maharashtra heading to the polls, which mode the cardinal players of the politically influential sweetener manufacture — some cooperative and backstage — align is being keenly watched

It each started with Vajpayee

Traditionally, sweetener successful Maharashtra has been synonymous with cooperative mills.

Not surprising, fixed the preferential attraction the mills got from successive Congress governments, starting with Yashwantrao Balwantrao Chavan’s, which made definite nary caller backstage sugar factory was started aft 1958. Chavan, and besides Vasantdada Patil aft him, saw sweetener arsenic a instrumentality for empowerment of the larger agrarian colonisation and their ain upwardly mobile Maratha farming community. Not granting immoderate caller backstage mill licences was an effectual mode to consolidate the community’s enactment of the Congress enactment successful Maharashtra.

Former CM Y B Chavan discouraged backstage mills aft 1958-58. (Express archive)

Between 1951-52 and 1998-99, the fig of backstage mills successful the authorities shrank from 14 to 3 — Ravalgaon Sugar Farm (Nashik), New Phaltan Sugar Works (Satara) and Saswad Mali Sugar Factory (Solapur) — portion that of cooperatives soared from 1 to 116.

As they grew successful numbers, truthful did their governmental and societal influence. With each mill procuring sugarcane from 10,000 oregon much farmers, it gave the president and directors of the cooperatives tremendous powers to wield patronage that could widen to the governmental field. Often, the founder-chairman of a cooperative sweetener mill would spell connected to presume bigger mantles similar that of the section Member of Legislative Assembly oregon Parliament. They would, then, walk connected the bequest to their sons and adjacent grandsons. Maharashtra has had a agelong enactment of main ministers — from Vasantdada Patil (who controlled the Farmers Cooperative Sugar Factory successful Sangli) to Vilasrao Deshmukh (Manjara successful Latur) — who roseate done the sahakari (cooperative) route.

A young Vilasrao inspecting operation of a mill.

But each that is past arsenic cooperative mills person made mode for backstage sweetener magnates. The recognition for this goes to 2 men.

The archetypal was Atal Bihari Vajpayee, whose authorities astatine the Centre, connected August 31, 1998, de-licenced the sweetener industry. Henceforth, anybody could freely acceptable up a sweetener mill, provided it was astatine a minimum 15-km radial region from an existing oregon projected caller factory.

The 2nd idiosyncratic was Thombare, who showed the mode to different backstage entrepreneurs. Thombare is ironically idiosyncratic who chopped his teeth successful cooperatives. Between 1978 and 1983, helium worked arsenic main accounts serviceman astatine the Ambajogai (Beed), Godavari Manar (Nanded) and Jai Jawan Jai Kisan (Latur) cooperative sweetener factories. From there, helium became the managing manager of 2 cooperative mills — Manjara (Latur), promoted by erstwhile Congress main minister, the precocious Vilasrao Deshmukh; and Vaidyanath (Beed), promoted by elder Bharatiya Janata Party (BJP) person Gopinath Munde.

Vilasrao Deshmukh astatine his mill

As Manjara’s apical enforcement during 1984-1997, Thombare oversaw the mounting up of the mill and its operations from the 1986-87 sweetener play (October-September). Munde’s Vaidyanath mill came up successful a grounds 11 months and, successful 1998-99, was India’s archetypal to crush 5 lt of cane during a proceedings season.

“I was with Vaidyanath till 1999-2000. That was the proceedings play for my ain factory, which took adjacent little clip (nine months) to beryllium ready. I was past shuttling betwixt the 2 locations. He (Munde) fto maine spell successful aboriginal 2000 aft I recovered him an capable replacement arsenic managing director,” recalls Thombare.

Thombare’s Rs 18-crore task was financed by a consortium of municipality cooperative banks that lent Rs 9 crore connected the “personal guarantee” of Munde. The remaining 50 per cent equity backing came from the promoters and immoderate 5,000 farmer-shareholders.

“Even today, 40 per cent shares successful my institution are held by 12,500 farmers… I americium myself from a husbandman family, calved and raised till superior schoolhouse successful this colony (Ranjani),” helium says.

Over the past 2 decades, Thombare has invested heavy successful a drawstring of initiatives astatine his mills. The Ranjani mill has a 23-megawatt co-generation works (which burns bagasse, the fibrous residue aft foodstuff is extracted from sugarcane) and a 150 kilo-litres per time distillery, which supplied 3.25 crore litres of ethanol to lipid selling companies successful 2023-24, utilizing B-heavy molasses and nonstop cane juice/syrup.

Thombare has further invested successful bio-digesters for treating the liquid effluent (spent wash) from the distillery to nutrient astir 60,000 cubic meters per time of earthy biogas. This biogas, containing 60 per cent methane, is purified to implicit 95 per cent (by removing c dioxide and hydrogen sulphide) for usage arsenic boiler fuel, generating different 1.5 megawatt of greenish power.

Another installation uses press-mud (another byproduct of sweetener manufacture), on with napier writer and workplace wastes, to nutrient 12,500 cubic meters/day of earthy biogas that is past purified, compressed and stored successful cascades. This compressed biogas is sold arsenic ‘BioCNG’ astatine Rs 80/kg.

Vilasrao Deshmukh (third from right) and his member Dilipao (second from left) astatine their Majara cooperative sweetener mill successful Latur.

“Ours is the archetypal sweetener mill successful Maharashtra to nutrient BioCNG. We merchantability 3,500-4,000 kg regular done 4 outlets astatine Ranjani, Dharashiv, Latur and Parli (Beed),” says Thombare.

The Ranjani portion besides has a submerged arc furnace works to manufacture 10,000 tonnes per twelvemonth of ferromanganese and silicomanganese alloys that are utilized successful steelmaking. “We installed it successful 2005 to devour our surplus co-gen powerfulness that the Maharashtra authorities inferior wasn’t buying. Power constitutes 60-65 per cent of the accumulation outgo of ferroalloys,” helium explained.

As Thombare paved the mode for backstage mills, others caught up.

The different large players

Vilasrao Deshmukh’s Manjara Group – managed by his sons, Amit and Dhiraj, and member Diliprao — has grown from 1 to 10 mills that unneurotic crushed 53.02 lt of cane procured from astir 1 lakh farmers successful 2023-24. Five of these are cooperatives, each successful Latur district, with a full capableness of 23,450 tcd. The remainder — 2 successful Latur and 1 each successful Dharashiv, Parbhani and Nanded — are nether backstage companies: TwentyOne Sugars, Jagruti Sugar & Allied Industries and Manjra Sugar Industries Ltd. Their combined capableness is higher astatine 27,600 tcd.

Equally large are the backstage sweetener empires of the extended household of Sharad Pawar.

Baramati Agro, belonging to the Maratha leader’s nephew Rajendra and grandnephew Rohit, has 4 mills – astatine Shetphalgade (Pune), Kannad (Aurangabad), Chopda (Jalgaon) and Jamkhed (Ahmednagar) — with an aggregate capableness of 29,500 tcd and crushing 34.70 lt of cane successful 2023-24.

Even bigger are the six mills — Daund (Pune), Jarandeshwar (Satara), Karjat (Ahmednagar), Omerga and Bhum (Dharashiv), and Samsherpur (Nandurbar) — linked to elder Pawar’s estranged nephew, Ajit Pawar, who controls the Nationalist Congress Party (NCP) founded by his uncle. These mills person a full capableness of 58,000 tcd and crushed 66.96 lt successful the past season, making him arguably the biggest of the sweetener barons.

Both Ajit and Rohit Pawar are contesting this Assembly predetermination — the erstwhile from the household bastion of Baramati and the second from the Karjat Jamkhed constituency connected the rival NCP (Sharad Pawar) faction’s ticket. So are Vilasrao Deshmukh’s sons, Amit and Dhiraj, arsenic Congress candidates from Latur City and Latur Rural respectively.

How backstage mills flourished

The proliferation of backstage mills, including the caller ones promoted by politicians (the Pawar household was traditionally associated with Baramati’s Malegaon and Shri Someshwar cooperative factories), has partially to bash with authorities policy.

In the past, not lone were licences reserved for cooperatives, they were besides allowed to conscionable 70 per cent of task costs done semipermanent loans from nationalist fiscal institutions, with the Maharashtra authorities providing guarantees for their repayment. Even for the 30 per cent equity portion, the authorities authorities subscribed up to two-thirds of the stock capital, which the cooperatives could gradually redeem astatine look worth by deducting a portion of the cane terms payable to farmer-members.

That enactment ended with some de-licencing and the authorities ceasing to put successful the equity oregon basal warrant for the loans of cooperative mills. Those who controlled the mills recovered it much expedient to commencement backstage factories connected their ain oregon adjacent get sick cooperatives. The Jarandeshwar mill, for instance, was started arsenic a cooperative by the Maratha strongman Vasantdada Patil’s woman Shalini, earlier it was sold to a institution allegedly connected to Ajit Pawar successful 2010.

“When the enactment to record IEMs for backstage mills was made available, we went for it. It made nary difference. Ultimately, we are serving farmers,” claimed Dhiraj Deshmukh of the Manjara Group.

Privatisation, however, did small to alteration the governmental clout these sweetener mills exercised successful Maharashtra.

A sugarcane tract successful Marathwada region. (Express photograph by Amit Chakravarty)

A erstwhile Managing Director of the Maharashtra State Cooperative Sugar Factories Federation, who spoke connected information of anonymity, said, “Look astatine it this mode — a large mill would acquisition cane from 20,000-30,000 farmers. Other than the mill, the promoter would besides tally a drawstring of different establishments similar acquisition institutes, aesculapian colleges etc. That is simply a root of some patronage and prestige successful the area.”

Thus, portion the mills whitethorn person changed successful their structure, the promoters proceed to beryllium politically important. Take the lawsuit of the state’s Minister of Public Health and Welfare and Shiv Sena campaigner from Paranda (Dharashiv), Tanaji Sawant. His company, Bhairavnath Sugar Works, runs 3 mills successful Dharashiv and 2 successful Solapur.

Not each backstage mills person been occurrence stories, though. Gopinath Munde’s household floated the privately owned Pannageshwar Sugar Mills astatine Renapur (Latur) successful 1999. That mill and the archetypal Vaidyanath cooperative person virtually turned sick.

The aforesaid destiny has befallen Armstrong Infrastructure Pvt. Ltd, the factories promoted by NCP person Chhagan Bhujbal’s household astatine Malegaon successful Nashik, and Shrigonda BJP MLA Babanrao Pachpute’s Shri Saikrupa Sugar & Allied Industries successful Ahmednagar.

Despite these setbacks, arsenic Thombre realised aboriginal on, the needle has decisively moved successful Maharashtra’s sweetener manufacture — from cooperatives to private.