Bailed out by the state Government last season following a sugarcane glut, the sugar industry in Maharashtra is heading for a much serious crisis. The abundance of cane this season is likely to result in over 100 lakh tonnes of cane remaining uncrushed, as against 43 lakh tonnes last year.

According to the latest report of the Maharashtra Rajya Sahakari Sakhar Karkhana Sangh — a federation of cooperative sugar mills — the plan for 2007-08 was to crush cane in 175 mills out of the total registered 212. However, as of December 29, only 147 mills had commenced their crushing season. The mills in operation have crushed 196.62 lakh tonnes of cane, producing 20.94 lakh tonnes of sugar.

On the same date last year, 156 mills were operational and they had crushed 243.72 lakh tonnes to produce 25.65 lakh tonnes of sugar. The current deficit is 47.10 lakh tonnes of cane and 4.71 lakh tonnes of sugar. The pace at which the industry is operating, the current season could be worse than last year.

Last year, about 794 lakh tonnes of cane was crushed in all to produce 91 lakh tonnes of sugar. With crushing starting about a month late, 43 lakh tonnes of cane remained uncrushed. The state Government had stepped in, offering relief to farmers in the form of Rs 25,000 per hectare, thereby shouldering a financial burden of Rs 132 crore.

Since the state Government includes politicians who are also sugar barons, the package to bail out the sugar industry included waiver of purchase tax worth Rs 252 crore, a transport subsidy of Rs 130 crore, and a counter-guarantee of Rs 160 crore to 72 sick mills.

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