Story behind Sugar subsidies

I came across this nice story in Economic Times,This is how aid money for poor farmers ends up in politicians pockets.


The Maharashtra government last week decided to extend its guarantee to loss-making sugar co-operatives trying to raise fresh money. A closer look at the list of the ailing mills makes it clear the cause of losses and the reason behind the government’s generosity. Many high-profile ministers in Vilasrao Deshmukh’s Cabinet and MLAs are associated with the mills. The list includes Sonhira sugar co-operative run by the co-operation minister Patangrao Kadam himself. A veteran Congressman from Sangli, Mr Kadam’s now-ailing sugar unit was inaugurated by none other than Sonia Gandhi seven years ago. Another prominent name is that of industry minister Ashok Chavan. He is associated with Bhaurao Chavan sugar co-operative at Nanded. Mr Chavan is now eyeing the chief minister’s chair and was recently in the news for the behind-the-scenes role in anti-Deshmukh lobbying. Another high-profile Nanded politician, Union home minister Shivraj Patil, is indirectly linked to the sops. Jai Jawan Jai Kisan sugar co-operative, run by Mr Patil’s close confidant in Latur, has made it to the list. Sugar co-operatives run by former ministers and Congress veterans Kallappa Awade and PK Anna Patil are other big names here. There are many NCP leaders starting with party chief Sharad Pawar’s nephew Ajit who have high stakes in the co-operative sector. Yashwant co-operative mill at Theur in Pune district controlled by Ajit’s right-hand man will be one of the mills that would come out of the red with the government aid. Also, Aadinath co-operative in Solapur figures in the list. Rashmi Bagal, the uncrowned queen of the state sugar industry and an NCP MLA, is associated with Aadinath, too. Others like Daulatrao Aher and Sundarrao Solanke — both BJP-turned-NCP men from Nashik and Beed, respectively — PK Anna Patil (Congress) and Narasing Patil (Jansurajya Party) will indirectly benefit from the decision.

“The state government alone has taken a hit of nearly Rs 800 crore by going out of its way to help sugar industry this year,” a top state government official said.