Package for Strengthening of Sugar Co-operatives as may be Policy Decided by the State Government

What is the Package for Strengthening of Sugar Co-operatives?

Package for Strengthening of Sugar Co-operatives is a Gujarat state government provision administered through the Director of Sugar, a directorate of the Agriculture, Farmers Welfare and Co-operation Department. Its unusual full title: "as may be policy decided by the State Government"; is the most important thing about it. Unlike a normal subsidy scheme, this provision has no published rate, no application form and no fixed eligibility formula. It is a standing budget line that allows the state government to put together a support package for a co-operative sugar factory when circumstances require, on terms decided case by case.

Gujarat's sugar industry sits entirely in the co-operative sector. According to the Director of Sugar, the state's sugar industry is 100 per cent operated by the co-operative sector, with 15 sugar factories working at an installed crushing capacity of 65,000 tonnes of sugarcane per day. Each of these factories is a co-operative owned by its member cane growers, mainly across the sugarcane belt of south and central Gujarat.

That ownership structure explains why the state maintains this provision. When a co-operative sugar factory runs into financial difficulty, a bad recovery season, a slump in sugar prices, an overhang of term debt, or a mill that has stopped crushing. The immediate loss falls on the member farmers, who are both the owners and the suppliers. Cane price arrears build up, and growers in that command area have nowhere else to send their cane. A strengthening package is the state's instrument for stabilising the factory so that cane payments resume and crushing continues.

Support of this kind is typically structured as state share capital contribution, a government guarantee for institutional borrowing, interest relief, or a direct grant tied to clearing grower dues. Which instrument is used in a particular case is set by the government resolution issued for that package. The Director of Sugar's office does not publish a standing rate, and no rate should be assumed.

Who is eligible for a strengthening package?

Eligible bodies:

• Co-operative sugar factories registered in Gujarat and operating under the state's co-operative law, within the jurisdiction of the Director of Sugar.
• Factories in financial distress that can document the position, cane price arrears to members, accumulated losses, suspended crushing, or an unsustainable debt position.
• Factories whose statutory accounts are audited and whose board is duly constituted, so that government has a counterparty able to accept the terms of a package.

Who is not eligible:

• Individual sugarcane farmers cannot apply. No personal cash benefit exists under this head. A grower whose cane payment is overdue should pursue it through the factory and, if necessary, through the Director of Sugar.
• Private and public limited sugar companies cannot apply. The provision is confined to the co-operative sector, which in Gujarat is the whole of the industry in any case.
• Contractors, cane transporters and harvesting labour contractors are not eligible — their dues are a matter between them and the factory.
• Sugar co-operatives outside Gujarat are outside the Director of Sugar's jurisdiction and are not eligible.

Because the package is granted on a policy decision, meeting the description above creates no entitlement. Government may decline a request or attach conditions such as management changes, cost reduction, or a repayment schedule.

What documents does a factory need?

How to apply for a strengthening package

1. Pass a board resolution at the co-operative sugar factory setting out the difficulty, the support sought, and the purpose to which it will be applied; most often clearing cane price arrears or restoring working capital.
2. Compile the financial file: latest audited accounts, season-wise crushing and recovery figures, the full statement of dues to member cane growers, and the position on term loans and bank limits.
3. Prepare a revival or viability note where the request concerns a closed or persistently loss-making unit, showing how the factory returns to sustainable crushing.
4. Submit the representation to the Director of Sugar, Block No. 8, 2nd Floor, Dr Jivraj Mehta Bhavan, Gandhinagar, and obtain an inward acknowledgement.
5. Respond to the Directorate's scrutiny. The Director of Sugar examines the accounts, the arrears position and the viability case before forwarding a recommendation.
6. Await the government's policy decision. The Agriculture, Farmers Welfare and Co-operation Department, with the Finance Department, decides the package and issues a government resolution setting out the instrument, the amount and the conditions attached.

How is a request tracked?

Requests under this provision are tracked through the Director of Sugar's office rather than any public portal. The factory's Managing Director should follow up on 079-23253436 or 079-23253437, quoting the inward number of the representation. Because the outcome is a cabinet-level or departmental policy decision, timelines are not fixed and vary considerably between cases.

Why requests are declined or delayed

• Accounts not audited or heavily qualified, so government cannot verify the position being claimed.
• No credible viability plan, a request that only asks for money to cover losses, with no path back to sustainable crushing, is unlikely to succeed.
• Board not duly constituted, or the factory under administrator control, which complicates who accepts the package conditions.
• Conditions not accepted by the factory's board, such as cost reduction or a repayment schedule attached to the package.

Key dates

No application window or last date applies. The provision operates continuously within the state budget, and each package is decided as and when government takes a policy decision. Requests are usually timed around the end of a crushing season, when the arrears position for the season is known.

Contact and grievance

• Director of Sugar, Gujarat to 079-23253436 and 079-23253437, fax 079-23256104, Block No. 8, 2nd Floor, Dr Jivraj Mehta Bhavan, Gandhinagar.
• Agriculture, Farmers Welfare and Co-operation Department: at agri.gujarat.gov.in, the administrative department above the Directorate.
• Cane growers with unpaid cane price dues should raise the matter with the Director of Sugar, who is the regulatory authority for co-operative sugar factories in the state.