Sugarcane, the raw material used in sugar industry, is bulky, and its sugar content reduces in haulage and time lag between reaping and sugar production. Therefore, the ideal location for sugar mills is in close proximity of sugarcane producing areas. The sugar industry is seasonal in nature and so is ideally suited to the cooperative sector. For entire year the farmers are engaged in producing sugarcane as it is an annual crop. When the crop is reaped, the farmers pool together their resources, set up mills within the sugarcane producing areas and produce sugar. The seasonal nature of the sugar industry is combated by setting up cooperative where farmers share the profits and losses.