Sugar barons back the BJP, weaken the Congress-NCP hold on western Maharashtra

23 October 2019
R Modi/Dinodia Photo
R Modi/Dinodia Photo

Ahead of the 2019 assembly elections, the Congress leader Satej Patil, a former minister of state for home in Maharashtra, actively campaigned for the party’s candidate for the Kolhapur South assembly, who is also his nephew, Ruturaj Patil. The Patils belong to an influential family in Kolhapur district, situated in Maharashtra’s sugar belt. It runs various enterprises including schools, colleges and the DY Patil Sahakari Shakar Karkhana, a sugar cooperative that has around thirty-thousand farmers as members.

Historically, the Congress and the Nationalist Congress Party have enjoyed electoral dominance in western Maharashtra because of their hold on its sugar cooperatives. This nexus generated financial and organisational muscle which resulted in electoral successes. But, in the past five years, many of the parties’ sugar barons defected over to the ruling Bharatya Janata Party. By Satej’s own admission, the ruling party has succeeded “in dislodging the Congress and NCP from the sugar cooperatives.”

Maharashtra produces the highest amount of sugarcane in the country after Uttar Pradesh. While the latter largely has private sugar mills, the model of cooperatives is dominant in Maharashtra. In 1950, the industrialist Vitthalrao Vikhe Patil set up the first sugar cooperative in Ahmednagar district. Around that time, cooperatives were established in various spheres, such as banking, credit societies, marketing societies, fisheries and poultry. But sugar factories remained the cream of the cooperatives and became a political currency in Maharashtra.

A senior Congress leader, who has been an active politician since 1990s, explained how sugar cooperatives were operating under the NCP and the Congress’s rule. Farmers did not sell their cane to a cooperative, but gave out the produce to it. The mill would crush the cane, deduct the cost of production and distribute the remainder among the farmers. “The beauty of the system was that since there was no sale, the factory did not have to pay income tax. In addition, the chairman of the mill would inflate the cost of production, fudge the numbers, create false accounts and bills and use benami transactions to divert the money to fund elections,” he told me.

This created a paper trail, but if no one looked at the evidence, the mills were safe, he said. “So, as long as the state government was ruled by the Congress and NCP, both the MLAs and sugar factories were safe,” he added. The financial gains allowed sugar barons to branch out their business ventures to different sectors, primarily the labour-intensive education and health sectors.

More importantly, the sugar barons who were politicians could deploy the cooperatives’ members for election campaigning, the Congress leader told me. This was possible as the cooperatives forged a close relationship with its members by providing additional services. The mills sold fertilisers at a lower cost than the market price and provided drip-irrigation facilities to its farmers. They also stood in as guarantors to loans taken by sugarcane farmers. As a result of this relationship, the NCP and the Congress preferred to give tickets to sugar barons rather than their own workers. This weakened the parties’ structure in western Maharashtra.

Tushar Dhara is a reporting fellow with The Caravan. He has previously worked with Bloomberg News, Indian Express and Firstpost and as a mazdoor with the Mazdoor Kisan Shakti Sangathan in Rajasthan.

Keywords: Assembly elections 2019 Maharashtra Nationalist Congress Party Congress