Kadapa, January 14: The fate of Kadapa Cooperative Sugar Factory at Chennur, near here, is hanging in the balance due to paucity of funds and differences between farmers and management.
The cooperative sugar factory was set up at Kondapeta village of Chennur mandal in 1970 with the view to boost sugarcane cultivation and provide better employment opportunities to unemployed youth and farmers in the district.
While the state government had invested Rs 1 crore, 7,500 farmers invested about Rs 80 lakh as their share capital.
In the last 20 years crushing had never been done to its full capacity of 1,250 tonnes per day due to various reasons. The main reason being less sugarcane output in the area.
Several technical reasons also added to the under performance of the factory.Due to lack of sufficient sugarcane to crush, the factory remained closed from 1995 to 2005. The factory was seized as loans taken for its operation were not repaid and the institutions which lent the money took to legal course.On the other hand, sugar factories started else where, much later than the Kadapa Sugar Factory, in both private and cooperative sector, fared well and improved their performance year after year.
Considering the plight of sugarcane growers in the district, then chief minister YS Rajasekhara Reddy revived the factory by clearing its debts, and investing another Rs 4 crore in the factory.
In 2005-06, the factory crushed 14,000 tonnes of sugarcane and one lakh tonnes in the subsequent year 2006-07. However, with the price of sugar dropping drastically, the company could not make any profit.
Farmers, who had invested on cutting and transportation of sugarcane that year, could not take up cultivation in 2007-08, which saw the factory crush only 37,000 tonnes. In the following year, sugarcane yield was only 6,000 tonnes, which the factory could not crush due to high operational costs.
The cane was transported to Srikalahasti and Nandyal sugar factories. In 2009-10, farmers harvested 30,000 tonnes of sugarcane and with no crushing in Kadapa factory, other factories bought the cane at a higher price.
Encouraged by profits on the crop that year and also assured by the district administration that they will be paid Rs 2000 per tonne of sugarcane, besides bearing the transportation costs, farmers took up sugarcane cultivation on massive scale in 2,500 acres.
However, the cashstrapped sugar factory requires Rs 5 crore to start crushing operations as it is not in a position to pay farmers the price assured.
If the factory has to function, the government has to invest another Rs 5 crore. On the other hand, farmers are adamant on their stance that they want Rs 2000 per tonne and transportation charges as assured, despite the district collector negotiating a deal with Srikalahasti-based Suddalagunta Sugar Factory to pay Rs 1,500 per tonne plus transportation charges. Farmers with the backing of political leaders threatened to intensify their agitation after Pongal.
Meanwhile, the prospects of the factory looks bleak due to shortage of funds.
There are 52 permanent employees, 100 on season employees and about 500 more getting indirect employment. Out of Rs 2.2 crore meant for input subsidy to farmers from the factory, half of the amount is being spent on salaries on the staff and if the remaining funds too are spent, the factory will be forced to shut down.
“Only the government can save the factory and help the farmers, who are dependent on it,” said factory MD Krishnamurthy Raju.
Farmer leader Ramasubba Reddy said that if the factory did not take up crushing, farmers and employees dependent on it will be at a loss.
–Agencies