One of the reasons for their present dismal situation is the extending of crushing season beyond a period when even the variable cost cannot be recovered. For the last two sugar seasons, crushing has extended well beyond May to end in July.

Sugarcane being an agricultural commodity needs to be crushed in a time bound manner for extracting the maximum quantity of sucrose. As per the climatic conditions in Tamil Nadu, the variation in the diarnal temperature (the difference between the peak high and low in the daily temperature) is maximum during the period from December to March. It is in this period the recovery is maximum. Any crushing before orafter this period would result in lower recovery progressively. As per the strategy drawn by the directorate of sugar which oversees the functioning of these mills, a break-even level of recovery has been arrived at for each mill and plans have been drawn up to complete crushing before the recovery falls below that level.

As per the calculations, the break even level of crushing for the mills ranges from seven per cent to nine per cent taking into account the cane related prices and conversion costs.

Sugar realisation prices have been assumed at Rs 1300 per quintal for free sale sugar and Rs 1100 for levy sugar for the purpose.

A study of historical data has revealed that recovery above these levels would be possible only if crushing is completed during mid-November and mid-May. The co-operative mills have registered cane to the extent of 70 lakh tonnes and would be requiring only 65 lakh tonnes as per the new scheme. They hope to divert balance cane to some private sector mills who would be in need ofcane.

For the next sugar season 1999-2000, the co-operatives are planning the planting itself based on this formula so that they are not faced with problem of surplus cane. But then, political interference is so high in this sector that it would be very difficult to implement this strategy entirely.

The problems for co-operatives began when the erstwhile AIADMK government a few years ago ordered the mills to crush every bit of cane in the field despite pathetic recovery levels thus pushing them into red. This coupled with the strike over the bonus issue is likely to make things all the more difficult.