BUSINESS MANAGEMENT OF MAT APRABH A CO-OPERATIVE SUGAR FACTORY LIMITED
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Date
1999-08-30
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UNIVERSITY OF AGRICULTURAL SCIENCES GKVK BANGALORE
Abstract
In India about 25 million farmers are engaged in the
sugarcane cultivation on 3.5 million hectares of land. At
present there are 416 sugar factories, of which 232 factories are
in co-operative sector whose major activities includes management
of procurement, processing and marketing of sugar and by
products.
Using the secondary data the various management activities
of the factory were studied. The study revealed that the area of
operation of the factory was 45 kilometer in radius, covering 585
villages. On an average the sugar factory procured only 70.77
per cent of total sugarcane produced due to low installed
capacity (3500 t/day). 81-17 per cent of the sugarcane area was
under late maturing varieties. 78.13 per cent of total cane bill
was paid in first installment. Major cost of procurement
included prime cost of cane (85.10%) purchase tax on cane
(6.14%), transport (4.07%) and harvesting (2.45%).
The average sugarcane crushed was 6.54 lakh tonnes with 4090
hours of crushing (186 days). Hours lost due to cleaning was the
highest (4.25%), followed by mechanical problem (4.24%), cane
shortage (3.25%), miscellaneous (2.41%). Sugar loss in by
products was 2.22 per cent which was lower than the norms fixed
by Bhargava commission.
The cost of production per quintal of sugar was Rs.837.25,
of which the raw material cost constituted a major share
(78.03%), other variable costs (7.01%), fixed costs (14.96%).
Factory earned a profit margin of Rs.0.33 per quintal of sugar
and by products sold. It implied that the costs and returns
obtained were almost equal with very nominal profit margin.
Sixty per cent of the sugar produced was sold in open market
and 40 per cent was through levy quota. The price spread of
sugar in Dharwad and Hubli market was Rs.102.81 (7.13% in
consumer's price). Major problems faced by farmers were low
price for cane, low harvesting charges paid by the factory,
delayed payment, shortage of labour during harvesting and problem
of transportation.
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