Maharashtra's cash-strapped cane growers to launch agitation

Sugarcane farmers warn of ‘halla bol’ agitation if properties of sugar mills defaulting on payments are not seized by January 28, 2019

By Gajanan Khergamker
Published: Tuesday 08 January 2019
Credit: Getty Images

Caught in a quandary, in election year 2019, the government finds itself doing a balancing act between the urban consumer and the sugar lobby.

Increasing the sugar price by even a rupee from existing minimum support price (MSP) of Rs 29 to the proposed Rs 31 will translate into increasing prices for a range of products affecting the urban consumer thereby thwarting political goodwill.

On the other end of the spectrum are the interests of about five crore sugarcane farmers and around five lakh workers employed in sugar mills across India. The government simply cannot risk upsetting them either.

Back in Maharashtra, on January 1, 2019, Swabhimani Shetkari Sanghatana leader Raju Shetti hit out at chief minister Devendra Fadnavis warning that sugarcane farmers would launch a ‘halla bol’ agitation if the properties of sugar mills defaulting on payments to farmers were not seized by January 28, 2019.

A delegation led by Mr Shetti had submitted a memorandum to the commissionerate on December 24, 2018, demanding action against the mills which failed to pay the dues to farmers within the 14-day payment bracket.

The factories have been unable to pay the sugarcane farmers their dues owing to the decline in price of sugar. And, the farmers aren’t relenting in the least.

The sugar industry in Maharashtra has always found itself in a spot, but is now in a state of crisis as mills struggle to pay sugarcane farmers even their basics.

The state’s sugar mills failed to disburse the entire amount of Rs 7,450.9 crore as payment for cane to farmers as the ‘fair and remunerative price’ or FRP, according to Maharashtra government’s commissionerate of sugar.

The mills only managed to pay Rs 2,875.37 crore of the dues, leaving Rs 4,575.53 crore as arrears. Maharashtra, with more than 50 lakh tonnes of sugar stocked from last year, has now decided to discontinue giving new permissions to factories. So, the issue of excess is the real scourge.

According to Indian Sugar Mills Association (ISMA), in 2014-15, India produced 283.10 lakh tonnes of sugar. The total sugar offtake during that season was 267.04 lakh tonnes (including domestic consumption + exports). In 2015-16, the country produced 251.25 lakh tonnes of sugar and the total sugar offtake was 264.53 lakh tonnes.

In 2016-17, the country produced 202.85 lakh tonnes of sugar and the total sugar offtake during that season was 246.07 lakh tonnes. In 2017-18, the country produced a whopping 324.79 lakh tonnes of sugar and the total offtake was 258.4 lakh tonnes.

The price of sugar in the international market stood at Rs 19 per kg, yet here in India, the government had an FRP based on the price of Rs 34 per kg.

Ideally, the mills pay the FRP as a first installment to farmers within 14 days of being supplied the cane. Following this, depending upon the factory’s earnings from sugar and by-products, the farmers receive a second payment close to the end of the crushing period, usually around March.

A third is received by them before Diwali. This time around, most mills haven’t been able to pay even the first installment. A proposal put forward by the millers to split the FRP in installments was shot down by the farmers.

Union minister Nitin Gadkari has been advising cane growing farmers to stop cultivating sugarcane or use their produce for ethanol production instead of sugar. This, in the absence of an ‘equal crop policy for all crops’, seems like a knee-jerk reaction.

The government is yet to find an actual solution to the crisis. In Maharashtra, of the 181 operational factories, as many as 74 haven’t paid any money till now for the ongoing season, and the palpable anger among farmers is justified.

Nationalist Congress Party (NCP) supremo and former agriculture minister Sharad Pawar has—on the lines of relief packages announced by state government of Uttar Pradesh, Punjab and Haryana—demanded that even Maharashtra extend aid of Rs 500 crore to sugar mills.

In a recent letter to Prime Minister Narendra Modi, Mr Pawar has highlighted a tremendous “unrest and depression” among small and marginal cane growers that is on the verge of triggering a mass-scale revolt in the future.

Fadnavis, on his part, has requested the Central government to increase the ex-mill MSP of sugar to Rs 31 per kg from Rs 29 per kg.

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