Government Plans Circular Economy Model for Cooperative Sugar Sector

The Ministry of Cooperation has initiated efforts to strengthen India’s cooperative sugar sector by promoting a circular economy framework designed to generate new value from sugar by-products and improve the sustainability of rural industries.

As part of this effort, a programme titled “Promoting Circular Economy in the Sugar Sector through Formation of a Multi-State Cooperative Society” was organised in Pune by the Regional Office of the National Cooperative Development Corporation (NCDC) at the Vaikunth Mehta National Institute of Cooperative Management (VAMNICOM).

The event was conducted under the guidance of the Ministry of Cooperation and chaired by Union Minister of State for Cooperation and Civil Aviation Murlidhar Mohol.

What is the government proposing for the sugar sector?

The Centre is exploring the formation of a Multi-State Cooperative Society framework aimed at bringing cooperative sugar mills together under a more integrated circular economy model.

The proposed structure is being envisaged by Indian Potash Limited and is expected to focus on creating value from sugar industry by-products, encouraging green energy use, and expanding rural industrial ecosystems.

Representatives from around 31 cooperative sugar mills from Maharashtra and Karnataka participated in the discussions surrounding the initiative.

What is a circular economy model in the sugar sector?

A circular economy model focuses on reducing waste and maximising the use of by-products generated during industrial production.

In the sugar sector, this could include converting by-products such as bagasse, molasses, ethanol, press mud, and other residues into commercially valuable products like biofuels, green energy, bio-based chemicals, fertilisers, and industrial inputs.

The government believes this approach can improve profitability for cooperative sugar mills while also supporting environmental sustainability and rural employment generation.

What did Murlidhar Mohol say about the initiative?

Addressing the programme, Union Minister Murlidhar Mohol said the objective was to “understand the national perspective and give practical shape to the progress of cooperative sugar mills through an integrated circular economy model under the Multi-State Cooperative Society framework.”

He added that the proposed framework would “promote circular economy in the cooperative sugar sector, create new opportunities for converting by-products into high-value products and strengthen an integrated rural industrial ecosystem.”

The Minister further stated that “the use of green energy and bio-based chemicals would also help in reducing fuel consumption.”

Why are Maharashtra and Karnataka important to this plan?

Maharashtra and Karnataka are among India’s leading sugar-producing states and have a strong cooperative ecosystem linked to sugar mills.

Because of their existing cooperative structures and large-scale sugar production, the government sees these states as key testing grounds for implementing the circular economy framework.

Raman Kumar, Joint Secretary in the Ministry of Cooperation, said Maharashtra, “being a developed cooperative-based State, can play a leading role in successfully adopting this circular economy model.”

What role will Indian Potash Limited play?

Indian Potash Limited is expected to play a central role in the proposed Multi-State Cooperative Society model.

During the programme, the company presented the key challenges facing the sugar sector and outlined the potential benefits of forming a multi-state cooperative structure.

The initiative is expected to focus on improving coordination among cooperative sugar mills, enhancing by-product utilisation, and creating larger-scale opportunities in green energy and bio-based industries.

What concerns did cooperative sugar mills raise?

The programme also included an open discussion session where representatives of cooperative sugar mills raised queries and concerns related to the proposed framework.

While details of the concerns were not disclosed, the discussions reflected the industry’s interest in understanding how the new cooperative structure would function operationally, financially, and administratively.

The government is expected to continue consultations with stakeholders as it develops the proposed circular economy framework for the cooperative sugar sector.

(With inputs from ANI)