Agriculture: DEATH OF A FARMER

Flawed government policies and the domination of the Maharashtra sugar lobby are driving sugarcane farmers to suicide

Sadiq Naqvi Delhi 

For the farmers of western Uttar Pradesh, sugarcane has always meant money. Every May and June agriculturalists from the area between Ghaziabad and Bareilly would queue up in automobile showrooms—the richer ones springing for big SUVs like the Mahindra Scorpio favoured by local politicians, the more modest shelling out for hatchbacks like the Maruti Alto, and the small farmers happily picking up the latest Hero Honda motorcycle.

A good sugarcane crop covered their entire year’s needs. And in this part of the country, sugarcane is the only
cash crop.

For the last two years, however, the queues of farmers at the automobile showrooms have disappeared in a sign of the tremendous agrarian distress in the region. Since sugar mills stopped releasing payments for the sugarcane crop due to financial difficulties related to a fall in sugar prices, automobile sales have plunged 25 per cent this year, says Sushil Yadav, who manages sales at Tanya Automobiles in Meerut, one of the oldest and biggest automobile showrooms in the area. “The farmers would usually come and buy an Alto. This year we haven’t seen many of them coming,” Yadav says.

A total of Rs 20,000 crore in arrears is pending with the several sugar mills across the country for the last two seasons. But with surplus supply driving prices for a kilo of sugar down to Rs 25, the companies say they simply cannot afford to pay their debts. The problem has multiplied due to a dip in the global sugar prices. The crisis has led to several suicides by distraught farmers, though the government has been reluctant to acknowledge the problem.

In September last year, in the small village of Dhikala, in Baraut, Rahul, a 35-year-old sugarcane farmer, shot himself. He died on the spot. Rahul was in distress over his inability to pay a loan of Rs 1.2 lakh he had taken from a bank.

In a similar incident in Tikri village in Baghpat, Rambeer Singh Rathi shot himself in the head. He used a countrymade pistol, plentiful in this region thanks to a thriving illegal gun industry in neighbouring Muzaffarnagar. Rathi took the drastic step when he was unable to pay the school fees of his children, after the mills stiffed him on payment of Rs 1.5 lakh he was owed for his crop.

In yet another case in Karkahuda in Meerut, Yogender Kumar jumped to his death from a cell phone tower in broad daylight on April 24.  He, too, reportedly owed debts amounting to Rs 4 lakh and couldn’t bear the loss of his wheat crop, which was destroyed by this year’s unseasonal rains. 

Debt-ridden farmers feel they have no choice but to take their own lives, rather than face the constant humiliation of being unable to pay their children’s school fees or their household expenses, said Yograj Singh, a young Bahujan Samaj Party (BSP) politician from Muzaffarnagar who served as a minister in the Mayawati government.

“This is a season of compounded misery,” said Yograj Singh, a young BSP politician from Muzaffarnagar who served as a minister in the Mayawati government. “First the mills didn’t pay for the sugarcane and now the incessant rains have destroyed other crops too.” The farmers who were yet to get their dues from the previous year still went ahead with the sugarcane crop, resulting in yet another bumper harvest. Singh believes this happened because they have no other option but to keep investing in sugarcane. The situation is similar to that in Vidarbha in Maharashtra, where a lot of farmers continue to sow cotton despite not getting enough money for their produce. Vidarbha is the epicentre of farmer suicides in the country. 

Singh says he’s never seen this kind of distress in this region, which has always been prosperous thanks to fertile soil and irrigation facilities. “A farmer committing suicide was unheard of in this region,” he points out. 

A member of the Jat community, which has been traditionally engaged in agriculture in this region, he argues that Mayawati provided more support to farmers than current Samajwadi Party Chief Minister Akhilesh Yadav.

When Mayawati was in power she doubled the cane procurement prices from Rs 125 per quintal in 2007 to Rs 250 per quintal in 2012, he points out. In contrast, today farmers are supposed to receive Rs280 for a quintal, but the mills are only giving Rs 240. That too only when they pay, something which hasn’t happened in the last two seasons.

“Is this government mixed up with the mill owners?” the politician asked, rhetorically.

Sugarcane has dominated the political discourse in this area for a long time. The Bharatiya Kisan Union and its legendary hookah-smoking, dhoti-clad former chief, Mahendra Tikait—who died in 2013— were dreaded by all governments. Every summer he would end up at the Boat Club in Delhi with thousands of his supporters, bringing the capital to a halt. Tikait wielded extraordinary influence for his ability to mobilise the masses for a fair cane price. Such was the dominance of the cane lobby among the farmers rights organisations that it left many wondering if other crop growers were not important players, says Devinder Sharma, an expert on food security and the agrarian crisis.

“The cane lobby in that sense worked against the interests of the farmers rights movement in general by only focusing on sugarcane,” Sharma says. 

The pricing system makes no sense to Jayant Chaudhary, the general secretary of the Rashtriya Lok Dal and the grandson of former Prime Minister Chaudhary Charan Singh. The mills are always complaining that sugar prices are low so they can’t pay the farmers, he points out. But such claims don’t stand up to scrutiny.

“How can the price of the finished product determine the cost of the raw material? Shouldn’t it be the other way around?” says Chaudhary, who has been busy visiting the loss-stricken farmers in an effort to revitalise the RLD. 

The sugar mills in the region, which include industry heavyweights like Mawana Sugars and Bajaj Hindustan, all say they can’t afford to pay the minimum procurement price set by the state. Many have said they will have to shut their factories due to court pressure to pay the farmers or liquidate their assets.

Mawana Sugars, for example, told the state government in March that it cannot afford to run its three factories in the state. However, it had to continue running after the state government warned that shutting shop would be illegal and detrimental to the interests of the farmers. 

Sharma argues that the mill owners plead poverty to blackmail the government into giving them more subsidy, rather than biting the bullet and modernising.

“For an industry that has got used to massive doles, and that too year after year, it is not easy to give up,” he said.

He pointed out a study which showed that, on an average, one tonne of sugarcane produces 100 kg of sugar, 150 units of electricity and about 35 litres of alcohol, along with other by-products. The market values of these manufactured products exceed Rs 40,000. “Aren’t the farmers therefore justified in demanding at least 10 per cent of the market value of what they produce?” Sharma asks.

Mill owners have a different take. Even the Rs 28.80 per quintal subsidy offered by the government is not enough, they say. Somansh Prakash, a wealthy farmer from Muzaffarnagar whose family also owns a sugar mill, believes that the genesis of the crisis lies in the decision to deregulate sugar prices by the second United Progressive Alliance government. He says it was a death knell for the industry.  The Morarji Desai government made the same mistake in 1978, also deregulating sugar. “Imagine, at that time the leaves of the sugarcane plant which are used for fodder were selling for Rs 6 while the cane itself sold for Rs 4,” Prakash recalled. “That time the slogan used to be ‘Ganna chaar, patti chhe, bolo Chaudhary Charan Singh ki jai’,” Prakash says. Charan Singh was then the Home Minister.

Before deregulation—which took place when Sharad Pawar, who himself has interests in the industry, was the agriculture minister—there was a monthly release mechanism in place with all the mills allotted a fixed quota to sell. This ensured a balance between supply and demand, and thus prevented prices from spiking or plunging. Once that regime was eliminated, there was no way to prevent excess supply from hitting the market and driving prices down for processed sugar. Yet the state was still dictating procurement prices for sugarcane.

One mill owner, who declined to be named, explained the seeming mystery. In a hushed tone, he told of a powerful forward markets lobby that pushed for deregulation because it suited their own financial interests. Pawar and current BJP Transport Minister Nitin Gadkari are both votaries of deregulation. The moment Food Minister Ram Vilas Paswan met with sugar mill owners to discuss reinstating regulations governing supply and prices, the two senior politicians rushed to the finance minister to lodge their objections, the mill owner claims.

“You can’t allow betting on such food commodities. There is an urgent need to check it,” he says. 

Importantly, both Pawar and Gadkari belong to Maharashtra, another big sugar-producing state, which enjoys distinct advantages over UP due to ready access to ports and other factors, says Sudhir Panwar, President of the Kisan Jagriti Manch and a professor at Lucknow University. While 40 per cent of UP’s sugarcane goes into the cottage khandsari and gur industry, in Maharashtra all the cane goes to the mills.

The mill owner from UP also pointed out that the provision to import raw sugar, refine it and export it back as white sugar is also hurting the industry. A few big industrialists have installed refineries near the ports.

“A lot of refined sugar is now flooding the domestic market,” the mill owner said. “In the last two years 40 lakh tonnes of raw sugar were imported while only 18 lakh tonnes of white sugar were exported back. This basically means that 22 lakh tonnes of sugar which should have been exported back were pushed in the domestic market.”

The government needs to cut down the time limit to export the refined sugar from 18 months to five months to ensure that it doesn’t flood the domestic market, he argues.  

To provide some relief to the stressed industry, the government has recently decided to hike the import duty from 25 per cent to 40 per cent. The UP government is also exploring more subsidies to ensure that the mills pay up. But is that a long-term, viable solution? Can the industry afford to survive on doles? 

 

This story is from the print issue of Hardnews: MAY 2015