Will the MP government’s relief package revive sugar mill workers’ fortunes?

Bhopal, Aug 19 (NationPress) In a significant move for the workforce of the now-defunct Morena Division Cooperative Sugar Factory, the Madhya Pradesh Cabinet has sanctioned a relief package to settle outstanding salaries and dues.

This decision, made on August 19, 2025, represents a crucial effort to address years of financial difficulties at the Kailaras-based facility, which has been inactive since the 2008-09 season.

The allocated funds, directed through the MSME Department, will also facilitate payments to sugarcane farmers and other creditors. In conjunction with this financial resolution, the Cabinet has approved the total liquidation of the factory and the transfer of its 22.34 hectares of land to the state government.

The land will be entrusted to the MSME Department for the establishment of employment-oriented industries in the Morena district. The equipment and machinery will be sold through a transparent process overseen by the Department of Public Asset Management. Initially, there were plans to create an MSME complex at the site of the closed sugar mill; however, local farmers have voiced their desire for the mill to be revived instead.

Urban Development Minister Kailash Vijayvargiya stated that the government remains receptive to either option. Nevertheless, he pointed out that farmers have largely moved away from sugarcane cultivation, which is vital for the mill's sustainability. If they resume sugarcane farming, the government will contemplate reopening the mill.

If not, efforts will be made to draw investments for the proposed MSME complex. The Kailaras sugar mill, which was registered in 1965 and began operations in 1971-72 with a crushing capacity of 1,250 tonnes per day, has been closed since 2008-09.

Factors such as chronic irrigation issues, declining sugarcane supply, management failures, and political meddling led to its decline. According to the minister, the unit has accumulated debts totaling Rs 54.81 crore. This liquidation signifies a shift from previous revival attempts.

In 2010, the state government had suggested a financial rescue for cooperative sugar mills, including Kailaras. Recently, in early 2025, Cooperative Department officials proposed a Rs 35 crore working capital plan to revive the unit. However, the Cabinet's latest decision indicates a pivot toward industrial diversification rather than a return to sugar production.

This move is taking place amidst wider concerns regarding the sustainability of cooperative sugar mills in Madhya Pradesh. Among the seven such mills—five operated by the government and two privately owned—most are either inactive or facing financial turmoil. Once a pivotal part of Morena’s agro-industrial landscape, the Kailaras unit now serves as a case study for MSME-led renewal.

While the government claims that this transition will create new job opportunities, the decision has ignited local protests.

In January 2025, farmers organized mass demonstrations against the planned auction of the mill’s land, advocating for revival over liquidation. Following public outcry, the auction was temporarily halted, and district officials assured that alternative options would be explored.

As the Cabinet formalizes the liquidation, focus shifts to how effectively the MSME Department can transform the site into a center for small and medium enterprises. The success of this initiative could serve as a model for other inactive industrial sites across the state.