Sugarcane turns bitter for farmers; academic math doesn’t work on field

Sugarcane acreage has gone up compared to the last season, and the Centre has already revised the Fair and Remunerative Price (FRP). Then, why are sugarcane farmers protesting?

They have complaints about the procurement process and prices. Peasants in Uttar Pradesh claim their dues have not been cleared yet. Protests are also going on in Maharashtra and Karnataka. While the unions have been organising sugarcane farmers, leaders of some political parties have also stepped in.

“Input costs are quite high in the case of sugarcane. I have asked CACP (Commission for Agricultural Costs and Prices) members to explain the specific source for ascertaining input costs. The answers were not satisfactory. They were academic,” said farmer leader Guni Parakash Thakur.

How prices are fixed

The CACP, an attached office of the Ministry of Agriculture and Farmers’ Welfare, comprises a chairman, member secretary, one official member, and two non-official members. The latter represent the farming community.

It CACP is mandated to recommend remunerative and stable pricing (called Minimum Support Price, or MSP) for 23 commodities. These comprise cereals (paddy, wheat, maize, sorghum, pearl millet, barley, and ragi), five pulses (gram, tur, moong, urad, lentil), seven oilseeds (groundnut, rapeseed-mustard, soyabean, sesamum, sunflower, safflower, Niger seed), and commercial crops (copra, sugarcane, cotton, and raw jute).

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The Centre approved FRP of sugarcane for sugar season 2022–23 (October–September) at Rs 305 per quintal for a basic recovery rate of 10.25 per cent, providing a premium of Rs 3.05 per quintal for each 0.1 per cent increase in recovery over 10.25 per cent. There will be a reduction in FRP by Rs 3.05 per quintal for every 0.1 per cent decrease in recovery.

However, the government also specified that there “shall not be any deduction in the case of sugar mills where recovery is below 9.5 per cent.” Incidentally, the basic recovery rate was increased from 9.5 per cent to 10 per cent in the 2018–19 sugar season. In such cases, farmers got Rs 275.50 per quintal, which has been increased by about Rs 7 per quintal in the current season.

Recovery rate is the amount of sugar that sugarcane yields during crushing. The greater the amount of sugar obtained, the higher the price sugarcane fetches.

A different story on the field

“Regarding pricing and other needs, I prefer to find out the details by visiting farmers on the field. I have collected several suggestions from sugarcane farmers in Uttar Pradesh and Punjab,” added Thakur, the Bharatiya Kisan Union (Haryana) leader.

He is also a member of the committee set up by the Centre to probe issues related to agriculture, including making MSP more effective and transparent, crop diversification, and natural farming. It is popularly referred to as the “MSP committee” since assuring remunerative price through legislation was a major demand of protesting farmers.

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“I am addressing the issue in committee meetings. Now look at inflation. Is it being considered? I am going to push for the cause of sugarcane farmers in MSP committee meetings,” Thakur said.

Incidentally, the umbrella of farmer unions—Samyukt Kisan Manch (SKM), which organised a year-long siege to Delhi—has refused to be a part of the committee, saying it is dominated by government representatives.

Low risk, high yield

Sugarcane is a perennial grass. Thus, it does not have to be replanted every year. This season, the produce is almost ready to be transported to a sugar mill, where samples will be taken from each load to test the sugar content. That determines the price of the load.

Next, raw sugar extracted from sugarcane is not fit for eating. This raw sugar is taken to a refinery, where it is washed, crystallized, dried, and packaged for the market. Apart from sugar, gur (jaggery), molasses, etc., are also extracted. Sugarcane also provides raw material for the second-largest agro-based industry after textile.

India and Brazil top the list—in that order—of sugarcane producers in the world. It is, thus, the most important cash crop of India. It involves less risk. Even in this irregular monsoon, it did better than most crops in the kharif season.

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In sugar production, India has surpassed Brazil. With the increase in the production of sugar in the past eight years, India, apart from meeting domestic requirements, has been exporting sugar, helping reduce our fiscal deficit.

Sugarcane regions include Maharashtra, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Karnataka, Gujarat, Madhya Pradesh, Goa, Puducherry, and Kerala.

Rise in acreage

Despite its performance, lower acreage was reported from Andhra Pradesh (down 37,000 hectare), Uttar Pradesh (35,000 hectare), Bihar (29,000 hectare), Madhya Pradesh (20,000 hectare), Haryana (4,000 hectare), West Bengal (3,000 hectare), Chhattisgarh (3,000 hectare), Uttarakhand (1,000 hectare), Punjab (1,000 hectare), and Assam (1,000 hectare).

Greater acreage was reported from Maharashtra (up by 1.20 lakh hectare), Karnataka (64,000 hectare), Tamil Nadu (5,000 hectare), Telangana (2,000 hectare), Odisha (2,000 hectare), and Gujarat (1,000 hectare). In all, about 55.73 lakh hectares of sugarcane coverage was reported till September-end, compared to the corresponding period last year, when it was 55.22 lakh hectare. Thus, 51,000 lakh hectares more area was covered compared to last year.

The main contention of sugarcane growers in several states—including Karnataka and Maharashtra—is that there is no clarity in the State Advisory Price (SAP) for sugarcane. Thus, farmers are not assured of a price that may go above FRP.

The Karnataka complaint

Absence of a clear pricing for sugarcane has led farmers to take to the streets in states like Karnataka. The Centre and the state governments determine the price of sugarcane. The Centre decides FRP based on the CACP’s recommendation. The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, announces it. The governments of the key sugarcane producing states announce the SAP, which is usually higher than FRP.

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“In Uttar Pradesh, the state government has fixed Rs 3,500 (per tonne) on 10 per cent recovery. But Karnataka has no such price guarantee for sugarcane growers,” said President of Sugarcane Growers’ Association of Karnataka, Kurubur Shanthakumar. He blamed the Centre for “betraying sugarcane farmers,” referring to the increase in FRP from Rs 290 to Rs 305 per quintal while increasing the sugar recovery rate from 10 to 10.25 per cent.

According to Shanthakumar, the increase in FRP will not be commensurate with the increase in input costs. That includes the money spent on cultivation, including fertiliser and pesticide prices, and labour costs.

“Prices are increasing—including fertiliser, fuel, or any other input cost. If the government can waive Rs 10 lakh crore loan of corporates, why not that of poor farmers?” he asked. “Farmers are facing several problems. The effect of the Covid pandemic is now apparent. Misery has struck in the form of floods. Desperate farmers are committing suicide. Their families are not getting any compensation. We demand a waiver of farmers’ loans,” he added.

The association has led several protests demanding the implementation of its demands. These included a siege on the crucial Bengaluru-Mysuru highway and a demonstration in the heart of Bengaluru last month. Apart from fixing MSP based on the Dr MS Swaminathan Committee report, farmers are demanding the abolition of Goods and Sales Tax (GST) imposed on agricultural produce and implements, he said.

He also urged the Centre to withdraw the proposed Electricity (Amendment) Bill 2022. It aims at privatising power supply, which also implies fixing of electricity consumption meters for irrigation pump sets. And, like Uttar Pradesh, the farmers voice concern over the reported efforts by sugar mills to withhold their payment.

Voices of Maharashtra

Similar protests are going on in Maharashtra, where sugarcane farmers are demanding announcement of SAP, among other things.

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Claiming that the Centre’s FRP is not enough, the founder of Swabhimani Shetkari Sanghatana (SSS), Raju Shetti, complained, “There is no state support or a guaranteed price. There is no SAP in Maharashtra and Karnataka. Every time, we have to hit the road to realise our demands. How long can this go on?”

He added that standing crops have fallen to floods in several parts of the state. He alleged that farmers, as well as the government, were losing money due to the faulty measurement process. Some unscrupulous elements were taking advantage of the system, he said.

“Every year, we lose roughly 1.32 crore tonne of produce due to this faulty process. The sugar produced from the ‘lost sugarcane’ could earn some Rs 4,500 crore every year. That translates into Rs 225-crore loss in GST for the government. Imagine the total loss…,” he pointed out.

The farmer leader said there are around 200 sugar mills in Maharashtra, which should ensure correct weighing. The process, he said, should be online directly under the sugar commissioner.

“For sugar, the government has fixed the price at Rs 31 per Kg. But it is being sold at Rs 32–33 per Kg. Moreover, they earn from exports too. Say, if farmers got about Rs 295 per quintal, sugar extracted from that load made around Rs 1,007. Shouldn’t sugarcane growers get at least Rs 200 more?” he asked.

Among the demands made by SSS are that farmers should get a down-payment rather than instalment payments. It claims that the rating process (quality) of sugarcane in Maharashtra and Karnataka is not transparent and is being misused.

The Uttar Pradesh grumble

Sugarcane farmers in Uttar Pradesh, too, are demanding payments that are due since the previous seasons. The eastern part of the state has a fertile plain where most farmers grow sugarcane. However, several problems related to cultivation and sugar mills are affecting both production and farmer-mills integration. There has been a decline in the institutional procurement of sugar.

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State government officials recently claimed that they have cleared over 84 per cent dues of nearly 45 lakh sugarcane farmers of Uttar Pradesh. Officially, Rs 5,560 crore is still due. The payment of these dues will depend on the clearance of stock in sugar mills.

Given the vagaries of nature this season, farmers fear losses. “I fear a loss of up to 20 per cent due to the untimely rains, inundation, and storms. Crops have fallen before cutting, affecting quality,” said Mukut Singh, a sugarcane farmer from the state.

“We get Rs 350–345 per quintal depending on the quality of sugarcane. Considering input costs, we have sought the price to be revised to Rs 450 per quintal. Even Punjab has increased SAP to Rs 380 per quintal of sugarcane,” he added.

While raising sugarcane SAP by Rs 20 per quintal, the Punjab government claimed to have cleared Rs 492 crore worth of dues to farmers. The state has been disbursing sugarcane farmers’ dues lately, accepted All India Kisan Sabha general secretary Hannan Mollah.

Despite the states’ and Centre’s claims, sugarcane growers say that their crop doesn’t taste as sweet in terms of returns.