Sounding another warning bell for the Nationalist Congress Party, which controls the state’s co-operative sector, chief minister Prithviraj Chavan on Monday said he was planning drastic reforms in the sugar production industry. Chavan’s statement comes in the wake of sugarcane farmers’ violent agitation in western Maharashtra that ended on Sunday after it was decided that sugar mills would offer a rate of Rs. 2,500 or more per tonne of sugarcane, up from the Rs. 2,000. Led by MP Raju Shetty, chief of the agrarian organisation Swabhimani Shektari Sanghtana, farmers in the region had caused damage to state and private property. A farmer had died in police firing, while another was killed while trying to set a four-wheeler ablaze.

“I want reforms [in the sugar sector], though it is difficult. We must understand that many cooperative sugar mills are closing down and private mills are coming up at a fast pace,” said Chavan.

The CM justified his move by citing the example of the NCP-controlled Maharashtra State Cooperative Bank (MSC bank), which was brought under the administrators last year for having negative worth and not possessing a banking licence. “We made the bank [MSC] profitable, and also got a banking licence after 46 years,” said Chavan.

Chavan reiterated that the state does not have any role to play in sugarcane pricing. “But, we are authorised to take action when mills don’t give FRP (fair and remunerative price) to farmers.”

The CM advised farmer activists to understand that all mills are not in a position to offer better price. “I’m of the opinion that the mills that have co-generation, distilleries and no debt liabilities would be able to give more in price per tonne. But how can one expect those mills that barely manage their business by raising funds through loans to offer more money? It’s simple economics,” he said.