Uttar Pradesh is considered to be the largest sugarcane-producing state in the sub-tropical zone, with a production of 135.64 million tonne cane.
The Indian sugar sector is very important in the rural economy. But the sugarcane farmers have been facing difficulties economically. It’s been nearly two months since the new season started, but the farmers are being forced to supply sugarcane to the same mills or they are being pressurised to sell sugarcane at jaggery prices to the crusher.
Previous Payment Not Processed
Even though the new season has started, the outstanding dues of sugarcane farmers in UP have not yet been processed. The dues stand at Rs 2,960 crore, of this, 94.63 crore rupees belong to thousands of farmers of Basti district.
The Allahabad High Court in its order stated that the payment should be made by 28 November. But the district’s Rudhauli sugar mill approached the Supreme Court, and the top court gave an extension till 31 March 2021 for payment.
"“The High Court on 28 September ordered payment in two months under case number 13952/2020. So that the farmers did not have to pay, the sugar mill spent lakhs on lawyers. Even the Supreme Court did not think about the fact that the sugarcane farmers will remain in trouble till 31 March.”" - Babulal Chaudhary, Sugarcane Farmer
Hindustan Sugar Mill GM RN Tripathi, in Basti’s Rudhauli, said that major reason behind non-payment is lack of factory efficiency. Tripathi also said that due to insufficient area, there hasn't been enough production.
Tripathi tells The Quint that Ethanol’s bisleri unit has been shut for two and a half years, and if the unit gets fixed, the system will automatically come back on track.
Similar issues are being faced by sugarcane farmers of other districts in Uttar Pradesh.
"“My sister is getting married on 1 December. The last payment has not been made yet, we’ve been constantly pleading with the District Magistrate. He asked us not to be dependent on the payment, but what are we supposed to do? How will I get my sister married? The farmers have lost so much during the lockdown, only payment of the money will help us. We don’t know when will get Rs 2.5 lakh from the payment.”" - Satish Rathore, a sugarcane farmer from Hardo told The Quint.
According to the farmers, if the mill fails to supply cane then the speculative slip is cancelled under the prescribed limit. So, the farmers have to supply sugarcane to avoid becoming defaulters for the coming year.
Earlier the farmers used to get the payment by the end of October. Since 2018, the farmers haven’t seen an increase in the price of the sugarcane. The farmers are compelled to take loans, hence increasing the debts.
Bumper Production, Increased Damage
According to the Uttar Pradesh government, a total of 119 sugar mills were operated in the crushing season 2019-20 in the state and sugarcane was taken from about 64,000 villages.
The total sugarcane area of the state was 26.79 lakh hectares, where the sugarcane productivity was 811 quintals per hectare, which is 6 quintals per hectare more than the previous year. During the crushing season 2019-20, 119 sugar mills of the state crushed 1118.02 lakh tonnes of sugarcane and produced 126.37 lakh tonnes of sugar.
This is the record for highest sugarcane crushing and sugar production in the state.
On 11 September 2020, the Lok Sabha was informed that sugar mills owed nearly Rs 242 crore for 2017-18. Rs 548 crore for the 2018-2019 crushing season and Rs 12,994 crore for 2019-2020.
What is the Problem With Sugarcane Farmers in Uttar Pradesh?
As per the government policies, there is enough supply of sugarcane, but the farmers are not being paid. Sugarcane farmer and activist Lal Singh Yadav from Sitapur told The Quint that one of the biggest issues which are faced by the farmers is the supply of slips.
Suppose a farmer has 1 hectare of land in the sugar mill area. If he/she wants to grow sugarcane on it and supply it to the sugar mill, first of all, he has to register with the Government Sugarcane Committee and open an account (speculative slip).
Under which, it is decided that the farmer has to supply a certain amount of the sugarcane to the sugar mill. Now suppose that it is decided that the farmer has to supply 200 quintals next year. If she supplies 200 quintals, then for the coming year, the supply will be 200 quintals only. But if for some reason the produce is only 50 quintals, say due to floods, then the farmer can only supply 50 quintal in the coming year.
"“Every year the farmer is afraid that if there is no supply of 200 quintals of sugarcane, then a short supply i.e 50 quintal speculative slip will be made and his 150 quintal of sugarcane will be wasted. If the mill doesn’t take it, then the produce goes to jaggery which does not yeild any profit”." - Lal Singh Yadav, sugarcane farmer and activist
The Quint asked the Additional Sugarcane Commissioner of UP VK Shukla about the payment of arrears of farmers, who stated that as the sugar mills are not able to make enough profits to pay, they pay in installments.
Shukla also said that due to no profit, the arrears of farmers remain the same every year.
Issues With the Mills
According to Deepak Gupta, general secretary of the Uttar Pradesh unit of the Indian Sugar Mill Association (ISMA), sugar prices did not increase in the proportion at which sugarcane prices increased in the past.
“The price of sugar is a little politically sensitive. Any government is hesitant to increase the price of sugar,” said Gupta.
“Today our cost of production is thirty-five and thirty-four rupees, while the selling price is thirty-two rupees per kg. That means a loss of Rs 2.5 per kg. There are other costs with this. At this time we are losing about four and a half rupees per quintal. In this case, how far will sugar companies recover it from their account,” Gupta tells The Quint.
The sugarcane byproduct gives a lot of support to the factories. But the thermal power produced from sugarcane fibre can only be sold to the state. It can’t be sold to anyone else.
The Uttar Pradesh government has not given its dues for a quarter of a year. There is an outstanding of one thousand crores, Gupta tells The Quint.
What’s the Solution?
Gupta says that the government decides the price of sugarcane that farmers have to pay, which is increasing.
“The price at which we will sell sugar is not being worked out. A sub-committee was formed under the leadership of Union Home Minister Amit Shah, which recommended that the price of sugar should be increased to Rs 33. But it is also pending for two months. When we export sugar, the mill is healthy, but the government did not declare the export policy for the 2020-2021 crushing season, which is the reason behind the loss,” says Gupta.
Last year, about 110 million tonnes of sugar was stocked. 300 lakh tonnes of sugar is expected to be produced in the new season. That means after this session, supply of sugar will be more than 400 lakh tonnes in the country.
The total consumption is only 250 lakh tonnes. To give a boost to exports, the government was subsidising the mills under the export policy for two years, but this time neither a new policy has come nor is it expected to come.
According to a report published in the Financial Times, the Minister of Food and Commerce has said that subsidy is not being considered this time.
However, agricultural affairs expert Devinder Sharma says that the problem of payment is not just this year, it is every year.
(The article was first published in Quint Hindi)
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