Major traffic routes were disrupted for almost a week over most areas in West UP districts and adjoining Uttaranchal to force the government to wake up to the sugarcane harvest this year. Sugarcane was burnt on the roads and in some fields. Ultimately the farmers won and the cane crushing season, which normally lasts about 4 months, has begun, almost 7 weeks late. Substantial loss has already been caused to the farmers, particularly the small and middle farmers who could not hold on to their produce till the end of the agitation and had to make distress sale of their cane at Rs. 35 to 50 per quintal. Farmers in UP have now been promised the statutory government rate of Rs. 95 and Rs. 100 per quintal.

These are unhappy days for the industry which is reeling under crises of overproduction and a corrupt government committed to implement WTO policy of importing agricultural produce even while no import is necessary. According to Union Agriculture minister, Shri Ajit Singh, sugar imported 3-4 years back is still lying unused in our stocks and we are not subsidising our sugar exports like the developed countries. There has been a fall in international prices of sugar due to devaluation of Brazilian currrency and if even one and a half months back the centre would have taken a decision on the suggestion of export subsidy this problem would not have arisen.

Sugar is selling at Rs. 13 per kg as against Rs. 17 while jaggery is down to half from Rs. 14 per kg a few months back and there are enough stocks to last the year. In fact the industry blames the govt. for announcing its intention of withdrawing fixed monthly quota release system and the  High Court order declaring monthly release quota mechanism as violative of the Constitution. The bigger corporate sugar mills with huge stocks from last year (120 lakh tonnes) had obtained the orders for free sale from the Court. This, according to the Indian Sugar Mills Association (ISMA), has led to the glut in the market, fall in prices and consequent inability of the sugar mills to pay the statutory purchase price to farmers. The ISMA has tried to solve its problem by targeting the farmers. It contested the UP government’s right to fix cane prices and the High Court upheld its claim. The judgement stands challenged and awaits finalization in the Supreme Court.

Actually UP Govt. was only utilizing the industry’s protest to squeeze the farmers. After all neighbouring Haryana is paying its farmers Rs. 105 per quintal and crushing season has been in full swing there. Moreover even if the ISMA was unhappy with the rates of sugarcane and they were refusing to open their mills, the UP government itself owns a large number of the 110 odd mills and it should have opened these. The industry rues over fall in prices of sugar and high cost of sugarcane it cannot afford to pay because the crushing cost itself comes to around Rs. 1400 per quintal of sugar according to them. But the industry neither blames free imports nor does it blame the massive rise in cost of other inputs like diesel, lack of and irregular supply of electricity etc. Infact a section of the industry, the big operators, are happy with the chaos being created by the open market system. During this entire period two mills in West UP, one in Modinagar and the other in Baraut, began crushing work on time. These were the ones owned by Modis. They had cleared their stocks in time and they are not members of the ISMA.

These issues are major problems for the sugarcane farmers who have over the years had to spend a lot on irrigating their fields due to irregular and low voltage power supply. Despite this they have been made to pay minimum power tariff. Meanwhile electricity and irrigation charges and cost of diesel have increased rapidly. Govt. levies on sugarcane supplied to the mills have increased and farmers suffer massive corruption in the weighing process. Farmers are becoming increasingly dependent on cash crops to cope with higher cost of farming and debt burden is rising. In 2000-2001 UP produced 43.94 out of 185.11 lakh tonnes, i.e., 23.74% of the country’s sugar and it grows almost 35.62% (1065.88 lakh tonnes out of 2992.12 lakh tonnes) of the country’s cane, centred in Western UP and Terai. Once sown the land is stuck for at least two years.

The farmers also suffer at the hands of the industry because of non-payment of cane dues and in the past they have had to conduct big movements sacrificing many lives for recovery of dues. According to UP’s Cane Development and Sugar Industry Minister, cane dues of last year alone are Rs. 387 crores or 7.69% of the total dues.

It is obvious that both the Govt. and the industrialists want farmers to bear brunt of the crisis. Under policies dictated by the World Trade Organization the country is importing agricultural produce, bringing in foreign investment into agro-industry including sugar mills and is unable to sell its own surplus produce in the international markets due to stiff competition and monopoly of big players. Big corporates, in collaboration with MNCs, have favoured open sale of sugar without any quota system. They are also the main purchasers of the cooperative sector sugar mills being sold by the govt. They can monopolize the markets and outsell the smaller industry, creating conditions for further squeezing the farmers. Their plan is to do away with the monthly quota system completely and do forward trading in sale of sugar.

The government and its funding agencies are propagating diversification of crops as a solution for farmers. There is however no ‘lucrative’ crop which will sustain profits for the farmer. And once the cropping pattern is shifted away from basic food items, the farmers will become easier prey to the giant multinational companies and their Indian compradors.

Problems of Paddy Procurement

The WTO regulations prohibit assured sale of farming produce and remunerative prices. Their logic is that this mechanism harms the market forces. In one way or the other the government has been following this policy. While there have been a number of movements of the peasantry against this provision and for MSP (minimum support price) the government is wary of directly closing down grain procurement centres. So this year it has attempted a subterfuge in the case of paddy procurement also.

Normally the government procured only ordinary varieties of paddy. This year paddy MSP was raised by Rs. 40 per quintal – Rs. 20 as increment and Rs. 20 to compensate for the drought – from Rs. 510 to Rs. 550. In this way the government tried to keep farmers assured. But at the same time the minimum rice recovery requirement from 100 kg paddy was raised to 67 kg i.e 67% while it was 62% last year and even less before that. The humidity requirement of the grain has also been raised from 17% last year to 18% this year. How can rice recovery rise suddenly without changes in variety and production methods and that too in a year of severe drought, the government alone knows. Under the pretext of this order, paddy is not being purchased. Varieties which give this kind of yield are much costlier than the MSP and do not sell in the government procurement centres. Varieties which the common farmers sow are not being procured now because they do not fulfill the above requirements.

The Govt. was careful not to announce this before rice was sown in June to prevent any flare-up of an agitation earlier on. Now the farmers who cannot hold on to their produce, the smaller ones, are making a distress sale of their paddy at as low as Rs. 400 per quintal. Gradually the middle ones too will be affected. These policies are affecting whole sections of the peasantry, not only by decreasing their savings through increased costs and low returns, but by wholesale destruction of their economy through such government created crises.

AIKMS has held a number of protests on the issue and farmers are beginning to understand the anti working people policies of the rulers and their foreign masters. The issues of assured government procurement, assured prices and timely declaration of the procurement price are catching up as is the issue of high input costs.