CHAPTER THREE

ORIGIN ANB ORGANISATION OF HIRA 39

In this chapter general and historical background of

*Hira' is discussed.

1. Location

'Hira* is located at Sankeshwar in Belgaum District of

Kamatak State. It is about 60 Kins from Kolhapur and 48 Kms i from Belgaum. It is close to boundary. Sankeshwar

is situated at a very strategic position* giving easy access

to Maharashtra* Konkan, Goa and * It is situated on

the banks of river Hiranyakeshi, after which the sugar factory

is named, Sankeshwar is a very old and holy city. There is a

Shankaracharya Math at Sankeshwar, About 5 kilometers from

Sankeshwar* there is another famous and holy Matha of

Lingayats* the Duradundeeshwar Matha* which is visited by

thousands of Lingayats and many other communities regularly.

2, Physical Features of the Area

The soil in this area is predominantly medium to deep

black. It is fairly rich in phosphorous. It is responsive to

irrigation and nitrogenous fertilizers. The average annual

rainfall is 771,7 mm. The temperature in this area is maximum 100°P and minimum 8G°F which is favourable to

sugarcane cultivation. The fanners in this area had. the knowledge of sugarcane cultivation since old times. They used 40 to prepare jaggery, Sankeshwar was a very big and famous jaggery market from where jaggery used to be exported to distant places.

River Hiranyakeshi flows through this area. The quality of soil# the climate and irrigation available due to

Hiranyakeshi river motivated the farmers to grow sugarcane.

There are three dams on the river Hiranyakeshi at Gotur#

Uilji and Gijavane, The inadequate rainfall has motivated the farmers to establish irrigation schemes. There are private pump-sets and also co-operative lift irrigation schemes. The timely requirement of abundant water is provided through these irrigation schemes. All these suitable factors motivated the farmers to establish the sugar factory in this area,

3, Area of Operation

The area of operation of *Hira* consists of the 167 villages of Belgaum district which are within the radius of

22 miles from Sankeshwar in addition to 77 villages in

Maharashtra area. One hundred and three villages in Hukkeri

Taluka# 38 villages in Chikodi Taluka# 22 villages in Sokak

Taluka and 4 villages in Belgaum Taluka in Karnataka and 64 villages in Taluka and 13 villages in Ajara Taliika in Maharashtra come in the area of operation of 'Hira*. 41

4« Aims and Objectives

The aims and objectives of Hira are listed in its

constitution and byelaws. They are as follows:

1 ■ To encourage self-help# thrift and co-operation

among its members*

2 To inculcate among its members improved modern methods

of agriculture and to supply seeds# manure# implements

etc, and to promote agriculture# industry# education

and well-being amongst members,

3 To manufacture sugar and its by-products out of the

sugarcane supplied by the members,

4 To advance loans to farmers to improve their

' agriculture,

5 To start industries for the utilisation of the

byproducts in the factory,

6 To undertake subsidiary and allied industries which

are conducive to the development and benefit of

the society,

5, Establishment of ‘Hira*

The idea of establishing a sugar plant on co-operative basis in this part of Sankeshwar first originated in 1954

4411 A 42 through the initiation of M.P. Patil# who was a Minister of

Co-operation in the State of Bombay at that time. M.P. Patil was from Sankeshwar and he knew this area well. He knew the active co-operative and political workers and also the crop pattern in this area. Due to his efforts and the lead taken by Appannagouda Patil# the factory became a reality in this part. Appannagouda Patil was a freedom fighter and a Congress leader of this area* He became the chief promoter and a founder member and worked hard to establish the factory.

With the successo of Pravara Co-operative Sugar Factory# the government of Bombay and also that of decided to launch co-operative movement in sugar industry - on a large scale. The government of Bombay proposed several projects to the government of India on the basis of applications received*

In 1954# the government of India granted licences to 10 projects for the crushing season of 1956-57 in Bombay State# of which 'Hira* was one. Appannagouda Patil# the Chief promoter of *Hira*# tried and got the licence. The factory was registered on 10th September# 1956# under the Bombay Co-operative

Societies Act# 1925. Even though Appannagouda Patil received a licence there were so many bottlenecks in the beginning.

A factor that brought instability was states' reorganisa­ tion. The leaders of Bombay State knew that state reorganisation 43 will take place and Bon%ay-Karnataka area was neglected. After the reorganisation of states, New Mysore State came in to existence on 1st November# 1956 and *Hira* was allotted to it.

Prior to that# it was merely registered# no other action was taken. Even the share capital was not contributed by the government of Bombay, After it was allotted to Mysore State# prompt action was taken by the government of Mysore, The

Mysore State contributed 20 lakh rupees towards the share capital of *Hira* in the form of redeemable shares. This amount was to be redeemed i.e,# repayed by the factory out of its profits and its own capital funds. The factory also obtained a loan of Rs, 75 lakhs from the industrial Finance

Corporation and rs, 30 lakhs from Mysore State Co-operative

Apex Bank - to meet the cost of plant and machinery*

The promoters required 20 lakh rupees towards the share capital of the proposed factory# which was a difficult target.

This was the first attempt by sugarcane growers to run a modern factory on a co-operative basis. There was a general scepticism about its success. The share amount of Rs. 1#0G0 was also a very big amount at that time. The farmers had to be convinced of the viability of the proposal. Most of the farmers could not visualise establishing and managing a factory that involved a complex organisation and an annual turnover of erores of rupees. Some of them suspected that 44

the leaders would ‘eat* their money if the proposal did not

materialise. Although some of the fanners were favourably

inclined to the idea# most of them were small farmers without

much ready cash to subscribe as share capital* The result

was slow collection of share capital* In order to remove

suspicions of farmers and to enhance their confidence rich

merchants of Banjager* caste were nominated as directors

on the Board* Farmers did business with such merchants and

they had faith in them, Therefore 3 Banajager* CUN. Ajari

from Gadhinglaj* G*R, Kanagali from Sankeshwar and M.V* Katti

from Chikodi were nominated on the Board, Their persuasion was important in making the farmers shareholders.

Factional rivalry in Congress party also affected

adversely in collecting share capital* The Congress party

in Kolhapur had two factions which were enimical to each other. One faction was led by Ratnappa Kumbha r* which was mainly supported by Lingayats and Jains, Appannagouda Patil was very close to this faction. Another faction was known as

Shreshthi faction. It was mainly supported by Maratha community,

This faction opposed the move of Appannagouda Patil to start a co-operative factory. Due to this conflict* factory shares were not purchased in large numbers in Maharashtra areas, A

Maratha# S.B, Chavan# was nominated on the Board of Directors#

* Banajagers Sub-caste of Lingayat, 45 so that Maratha farmers would purchase the shares of factory.

But Marathas did not come forward to become shareholders of the factory. On the contrary they opposed the move,

*Hira* is significant in more ways than one. It marks a new era in the sugar manufacturing industry in India# for# this factory is one of the first factories constructed by the

Indian firms# with only about 20% of the parts imported from abroad* Again# it was the only one of its kind in this part; otherwise it was industrially a backward area of Belgaum district. It is also significant to note that the entire erection of the plant was completed in a record time of just one year. Foundation stone# marking the beginning of any work on the factory site# was laid on 20th May# 1960# the factory was in a position to take its trial crushing on 2nd June,

1961, After this trial crushing# the factory went into regular production on 5th November# 1961,

Since the establishment of the factory# it has made steady and sustained progress and proved to be a successful enterprise. It repaid the loans taken from the industrial Finance Corporation and from the Mysore state Co-operative

Apex Bank, Similarly# it has re-paid the share capital subscribed by Karnataka government, Thus, within a short; period# the shareholders of 'Hira* became full owners of the 46

factory. In the process they created assets worth millions

of rupees. The factory expanded its daily crushing capacity

from 1,250 tonnes in 1960-61 to 1,750 tonnes in 1968-69,

then to 2,600 tonnes in 1975-76 and to 3,500 tonnes in 1980-81,

Further, the factory has started an alcohol plant in 1972-73,

It has also helped its shareholders, through its various services to increase their per acre yield of sugarcane. It

has also succeeded in paying continuously higher prices for

the cane supplied by agriculturists,

6, Premises of *Hira*

'Hira* has 150 acres of land, out of which about 25 acres of land is used for sugarcane cultivation and research.

On the remaining land the entire sugar factory complex is constructed. As one enters the premises of the factory, through its large gates, one notices a beautiful garden at the right side, sugar crops at the left side and high walls of the factory in the front. The factory looks like a small castle with,its surrounding walls about 20 feet high and with two towering Chimneys attracting the attention from a distance. The walls are pierced by a big iron gate, on both sides of the main iron gate there ate two small gates which are used by the' workers to enter the factory,. At the bade of the factory the same arrangement is made. But the back gate 47 and the passage are kept open only during the sugar crushing season for the trucks and the carts loaded with sugarcane to empty their load into the cane carrier*

At the front gate# there is time office and watch and ward office* They are situated facing each other on the two sides of the gate. The gate is manned by the uniformed guards.

Inside the walled area# there is sugarcane processing plant. In the manufacturing department huge machinery is installed in a two-storey building. Here actual operation of the production of sugar takes place. There is a laboratory also# where all the manufacturing tests of juice are conducted. There are also large godowns to store sugar# a big workshop etc. Near the sugar plant there is alcohol plant where alcohol is produced from the molasses.

As one passes through the left side road outside the walled area# one sees a big and beautiful Mahadev Temple, The temple was built by the factory. Close to the temple is a big auditorium which can accommodate about 1#00Q persons. It is used for staging plays# for screening films and other cultural programmes. The factory arranges a free film show at least once a week for the workers and their families,

Prom the temple one can see a large number of residential 48 quarters of various types for the employees of the factory. The employees of factory are entitled to residential facilities*

They get quarters according to their grade and seniority* All employees pay a nominal rent for housing. They are supplied water free of charge and electricity upto 25 units per month is also free. There are 24 *B* type bungalows at the rent of

Rs. 55A per month for officers like Managing Director#

Secretary# Chief chemist# Chief Engineer etc. There are 24 *C* type quarters at the rent of Rs. 35/- per month for other heads of departments and sectionsi There are 48 *D* type quarters at the rent of Rs* 10/- per month for clerks, typists etc. and 108 ‘E* type houses at the rent of Rs* 7/- per month for other menial workers. Thus# allotment of residential quarters is'hierarchical* Those occupying higher positions in the factory live in bigger and better houses and those who are at the bottom live in smaller houses*

To the right side of the walled area# different structures, are constructed. The first building near the garden is the

Guest House for the visitors to stay. It is also used by the directors to take rest and to meet the shareholders. Prom the

Guest House one can see the bronze statue of late Appannagouda

Patil# founder of the factory. Near the Guest House there is the main administrative office. Recently it has been enlarged with new construction. In this large building accounts 49 administrative# agricultural and other minor departments are housed. There are also the offices of the Chairman# the

Managing Director# the Secretary etc* There is also a meeting hall where meetings of the Board of Directors and its various committees are held.

The entire area is full of people and full of activities during the crushing season and the work Is done in 3 shifts.

At the beginning of every shift'a warning siren is blown. The office employees work from 11 a.m, to 6 p.m, f

7, Economic position of *Hira*

At present *Hira* is a leading co-operative sugar factory in Karnataka, It has repaid all its loans taken to construct the sugar factory and also repaid the loans taken for expansion. It has repaid the share amount of Karnataka government. It has a cash credit of 10 erores of rupees with

B,D*c,c, Bank# Bel gaum. At the end of 1982 it had a loan of

Rs, 5,14 erores. Authorised share capital of *Hira* Sugar

Factory in 1982-83 was Rs, 100,70 lakhs. It has taken deposits from the producer-members as per the bye-laws of the society.

On these deposits the producer-members are paid interest at the rate of Rs, lo per year, Due to this scheme of deposits the producer-members have collected erores of rupees of deposits, which has resulted in inproving their economic 50 condition. The details of the various deposits are shown in Table No. 3*1,

Table No* 3*1

Deposit of the shareholders till 30,9,1983

Sr, No* Name of deposit Amount in lakhs

1 Non-refundable deposits 54.97 2 Expansion scheme deposits 236.20 3 Special deposits 131,81 4 *C * class special deposits 43.96 5 •C* class expansion deposits 32,19 Total s 499,13

Sources Records of Hire Sugar Factory

Hira Sugar Factory has put 0 aside funds out of its profits worth Rs, 735,86 lakhs for various purposes. The details are shown in Table No, 3,2

' 5 51

Table No. 3.2

Funds put aside as on 30.9*1983

Sr. No. Name of Fund Amount in Lakhs

1 Deposit • •. 41.53

2 Expansion of factory 45,39

3 Expansion of Distillary 4.73

4 Depreciation » factory 552,00

5 ,, - Distillary 56« 44

6 Molasses collection fund 23.08

7 Business ups and downs fund 5.95

8 Dividend fund ... 2,38

9 Sinking fund *,, 4.77 Total 735,84 Source: Records of Hira Sugar Factory.

Hira Sugar Factory has invested funds in various societies worth Rs* 82.14 lakhs. The details are shown in Table Ho. 3.3.

Table No. 3.3

Funds invested in various societies upto 30,9.1983

Sr, No, Name of Society Amount in lakhs 1______2______’ ______3 ______

1 D>,C,C, Bank Bel gaum (Share) 10.00

2 D.C.C. Bank Bel gaum (deposit) 51.02 52

Table No. 3,3 contd.

1 2 3

3 Mangalore Chemicals and Fertilisers (Share) 5,25 4 IFCO (share) i.oo ’ 5 I.F.C. Bond 1.00 6 National heavy engineering co-operative society 3,00 7 Corporation Bank/ Sankeshwar 9.67 8 Post and N.S.C, 0.75 9 Others 0,45

Total i 82.14

Source : Records of Hira Sugar Factory

Hira Sugar Factory has immovable property worth Rs, 1/212, lakhs. The details are shown in Table No, 3.4,

Table No. 3.4

Value of immovable property of 'Hira 1 upto 30,9 ,1983

Sr.No. Item Amount in lakh 1 2 3

1 Land 1,27

2 Land deposit 2.14 3 Building 109.42

4 Roads 10,49

5 Electrical 26,09 6 Factory machinery 283,82 53

Table No* 3*4 contd.

1 2 3

7 Other machinery 21,96

8 Vehicles 55.56

9 Crusher 16.63

10 Irrigation schemes 4.29

11 Distillary 68.02

12 Dairy building 2,64

13 Expansion schemes 529.27

14 Distillary expansion 37,55

15 Water supply 26.09

16 Waste water disposal pipe 12.36

17 Molasses tank 4.95

Total 1,212.55

Sources Records of Hira Sugar Factory*

The above mentioned tables show that Hira Sugar

Factory is in a sound economic condition*

Table No. 3,5 contains detailed statistical information of sugar production expenditure from 1965-66 to 1982-83, It gives us information regarding sugarcane crushed, sugar produced, sugar average, production expenditure and rates paid to the members for the sugarcane supplied by them. The years

1967-68 and 1980-81 are very important because in these two years ' Iiira' paid the highest rates in India to the sugarcane 54 supplied by the members, *Hira* had always been paying the highest rate to sugarcane in Karnataka,

Table No, 3,5

Yearwise production expenditure of sugar ar GHira^ Sugar Factory# Sankesbwar

Sr, Year Cane 'Sugar Sugar Production Cane rate No. crushed produced average expendi­ paid to in in Qtls* ture members tonnes Total

1 65-66 1,87 , 414 2,14,089 11*42 87,77 59,5o 2 66-67 1,46,861 1,81,823 12,37 93,42 69,00 3 67-68 2,27,779 2,82, 460 12,40 195,84 210.00 4 68-69 2,85,846 3,15,941 11,05 141,50 111.00 5 69-70 3,14,166 3,46,668 11*04 117.41 99.00 6 70-71 2,76,375 , 3,33,500 12,06 132,44 115.50 7 71,72 2,83,563 3,41,787 11.75 182.66 164,00 8 72-73 2,60,189 2,70,430 10,38 196.75 151,65 9 73-74 2,17,957 2,4.4*710 11,24, . 214. 23 180.00 10 74-75 3,78,018 4,37,280 11,56 213,49 175.00 11 75-76 3,97,75q 4,41,940 11.11 229,64 165.00 12 76-77 4,87,783 5,31,824 10,83 216,53 162.00 13 77-78 4,46, 480 5,05,180 11,26 186# 43 131,00 14 78-79 5,18,399 6,16,020 11,12 222,42 162.00 15 79-80 3,78,865 3,51,590 10,92 412,45 300.00 16 80-81 4,84,763 5,43,407 11.21 388,91 330.20 17 81—82 4,88,604 6,55,154 11,13 330.26 250,00 18 82-83 5,77,905 6,41,632 11.10 333.04 235,00

Source? Records of Hira Sugar Factory# SankeshWar,