Has government failed sugarcane farmers

The crushing season for sugarcane has already started but sugar mill owners are yet to take up the process of measuring areas of cane fields and purchasing canes from farmers. This delay in the process has created severe problems for cane farmers across the country. The purchasing and measuring should have been completed in August itself but it has not been completed till today. The agony of farmers is further aggravated when the government tries to bail out mill owners, instead of helping poor farmers. Recently in a dramatic move, the government had proposed to provide Rs 47.50 per quintal as subsidy amount directly to the farmers. The government might be seeing this act as a step taken towards farmers’ welfare, but the truth is to the contrary. Altogether, it can be seen as a conspiracy to shift farmer’s focus from previous outstanding balances, which have not been cleared till now, and the fact that there has been no increment in the rate of sugar cane in the last few years. Here, the bitter truth is, the Central government, which has been incentivising the mill owners by providing interest-free loans, relief in excise duties on ethanol and other export duties, has gone every mile to satisfy them but has not taken a single step towards raising the minimum support price of canes.

It is shocking that there has not been sustainable increase in cane prices in the last three successive financial years. This year too, the goverment has refrained from doing so and has finally fixed the price of cane at Rs 230 per quintal. In the price fixing process, the government has once again betrayed the farmers and protected the interests of mill owners only.

The mill owners claim that their sugar production cost is around Rs 37per kg, and market price is Rs 28 to 29 per kg. Taking the owners’ woes into consideration, the central government has taken timely steps to help them out, but it has always provided sustainable cost price to the farmers. According to the Sugar Cane Control Order, also known as Bhargav Formula, it was suggested that the payment to the cane farmers is mandatory within a period of 14 days, once the farmer hands over his product to the mill gate. If the mill owners fail to make payment within 14 days, there is a provision of charging 15 per cent annual interest on due amount. Forget interest component, the realisation of even the principal component becomes a matter of serious concern for the farmers. Interest — their legitimate right — still remains a distant dream.

Previously the whole cost was borne by mill owners. However, as per the recent proposal of providing subsidy, the mill owners will be required to pay only Rs 182.50, not Rs 230 per quintal. In such a situation, an obvious question arises that if the govt. can bear the expenses of mill owners, why can’t it take the pain of increasing the pricing of farmer’s produces This time, in one go, the government has benefitted the mill owners by relieving them of Rs 47.50 per quintal. For the cane farmers, policies have always been detrimental to their interest and favouring the mill owners. There are several such instances when owner’s interests have been largely benefitted. On June 10, 2015, the government had announced an interest free loan of Rs 6,000 crores for the mill owners. A part of this heavy amount was to be taken from sugar development fund only. The government had also announced an interest-free loan of Rs 6,600 crores to the mill owners on January 3, 2014. Under this announcement, Rs 6,420 crores have already been used by the mill owners till September 30, 2014. It is also worth noting that the UP government has already been paying Rs 40 as financial assistance to the mill owners from the public exchequer. Prior to this, the central government had permitted to add five per cent of ethanol into petrol, so as to improve the condition of mills. Later it increased the cost of ethanol from Rs 32 to Rs 49 per litre. Not only this, the government also exempted mill owners from paying the excise duty on ethanol, which is around 12 per cent. In another move, Rs 140 crores were allocated to 19 mill owners of Maharashtra till March 2015. This big financial bonanza has been provided from the sugar development fund. In order to benefit the domestic sugar mills, the central government has increased the import duty on sugar by 10 per cent. Earlier the rate was 15 per cent, which later increased to 25 per cent. Presently it is at 40 per cent. This huge increase in import duty has also caused difficulty for sugar import in the country. During the financial year 2014-15, the goverment had provided a subsidy of Rs 4,000 per tonne on the export of raw sugar. Under this scheme, subsidy was announced for 14 lakh tonnes of raw sugar. Thus, the government has expended a big subsidy amount of Rs 560 crores for just benefitting the mill owners. The previous UPA government too promoted the interests of mill owners only. Providing reliefs in taxes, this government had benefitted sugar mills by Rs 11 per quintal.

The fact is — irrespective of the party in power, none have addressed the farmers’ problems. All of them have maintained mysterious silence on agricultural and agrarian issues. In the tenure of one and half years, the NDA government has done nothing to address the grievances of farmers. The government has retracted from the promises made to the farmers in its general elections manifesto. Neither the government has fulfilled its promises, nor has it increased the minimum support price. In absence of supportive policies, suicides by farmers is increasing at an alarming rate.

Natural calamities are other major problems for farmers. Currently, around 320 districts of the nation are suffering from severe drought. The last year’s hailstorm and recent drought have crushed the backbone of Indian farmers, but the disaster management mechanisms are yet to function in this regard. In case of natural calamities, the government has proposed not to provide compensation on losses of less than 50 per cent. Insurance schemes have also failed to protect farmer’s interests in India. Taking the example of Rajasthan alone, insurance companies have collected a big sum of Rs 1,800 crores in the last six years. The companies collecting Rs 300 crores annually as premium of insurance, have paid only Rs 50 crores as compensation to the farmers claiming damages. Another figure of National Agricultural Insurance represents pathetic situation of compensation paid to the farmers. For the year 2014-15, 6.47 lakhs of farmers from 65 different districts of UP insured their crops by paying Rs 2,136 crores, but now, a small amount of Rs 1.65 crores has been granted as compensation for around 7581 farmers. Recently in Madhya Pradesh, Rs 25-27 was given as compensation, which is a mockery of the distressed farmers. In order to strengthen the aggrieved Indian farmers, Dr Swaminathan recommended providing MSP+ 50 per cent beneficiary price to the farmers on agricultural products. This act of government will not only boost the farming sector economically but also give wings to the lost hopes of agriculturalists. The problem is not confined only with the Cane farmers but it has become common for all. The cotton growers of Punjab have registered their protests few days back. They have suffered severe loss as white insects caused complete damage to the cotton crop. The government on such accounts has never been supportive by providing necessary assistance like subsidies and compensations. In such a situation, the Central government must understand that farming is not only a commercial unit but it is more of a life style and a major source of livelihood for almost 65 per cent of the Indian population. Therefore, it should also be treated with the same regard and efficacy as “Digital India” and “Skill India,” if not more.

The author is a Rajya Sabha MP from JD(U)

As agriculture is the first enterprise of “Make in India”, the government must maintain its efficiency.