Sugarcane farmers in western Maharashtra Monday called off their violent four-day-old agitation, giving sugar mill owners and the government two weeks to find the money to pay them their full dues. The agreement was reached after daylong meetings between farmers and representatives of sugar mills, allowing the mills to resume crushing operations in evening.
Protesters led by the Swabhimani Shetkari Sanghtana had paralysed harvesting and transportation of sugarcane between Friday and Sunday. Offices of both cooperative and private sugar mills had been attacked, vandalised and shut down by farmers in the sugarcane heartland of Kolhapur, Sangli, Satara and Solapur districts, and sugarcane trucks on the Pune-Bengaluru highway were stopped near Tandulwadi in Sangli.
This region accounts for 60% of Maharashtra’s, and 30% of India’s, sugar production. What are the issues in the unrest?
What triggered this round of sugarcane farmers’ protests?
The Swabhimani Shetkari Sanghtana led by Raju Shetti has consistently opposed the decision of sugar mills to pay the fair and remunerative price (FRP) in instalments, and demanded payment in one go. Two months into the crushing season, mills in Maharashtra have done poorly in the payment of FRP. Figures published by the Maharashtra government’s Commissionerate of Sugar show that until December 31, mills owed farmers a cumulative Rs 4,575.53 crore — of the total payable FRP of Rs 7,450. 89 crore, farmers had received only Rs 2,875.36 crore. As many as 74 factories, mostly in the districts of Kolhapur, Sangli and Satara, have still not made any payments to farmers. Taken together, cane dues in the states of Maharashtra and Uttar Pradesh, which account for almost 75% of the crop grown in the country, have already crossed Rs 11,000 crore, and arrears are set to peak around April.
Why are sugar mills unable to pay farmers their dues?
Thanks to assured irrigation and conducive climate, sugar mills in this region are able to realise higher amounts of sugar per tonne of cane crushed. As the FRP of cane is linked to its sugar recovery, the average rate payable to farmers here is around Rs 2,850 per tonne net harvesting and transportation charges. This is huge compared to, say, Pune or Ahmednagar, where farmers get an average net FRP of around Rs 2,200-2,300 per tonne. Growers in Marathwada have an even lower realisation.
Since the beginning of the current crushing season, mills across Maharashtra have said that the present sugar realisation of Rs 2,900 per quintal would not be enough to meet the production cost of Rs 3,400 per quintal. Banks, millers say, have valued sugar at Rs 3,000 per quintal, and 85% of this would be made available to them as working capital. 15% of this amount would go towards meeting expenses like gunny bags, salaries etc., leaving just enough to pay farmers at the rate of Rs 2,300 per tonne of cane.
Farmers in Ahmednagar and Marathwada, under pressure to sell their cane early due to the drought, have not protested the payment of FRP in instalments.
What is the way forward in this situation?
Mills have knocked on the doors of both the central and state governments seeking a bailout package in order to be able to pay farmers. Former Union Agriculture Minister Sharad Pawar had asked for a package of Rs 500 crore to pay farmers the FRP. Millers had met Chief Minister Devendra Fadnavis for direct transfer of Rs 500 per tonne into the accounts of farmers, or to raise the minimum selling price of sugar from the present Rs 2,900 per quintal to at least Rs 3,500 per quintal. No concrete step has been taken so far.
Cane is a highly political crop, and frequently decides the fate of leaders in Western Maharashtra. Arrears could peak just as voting for the Lok Sabha elections begins, and the last thing the ruling party in both the Centre and the state would want is to face full-blown farmer protests. Shetti, the MP from Hatkanangle Lok Sabha constituency that covers the districts of Kolhapur and Sangli, has been in talks with the NCP-Congress; that, however, has not kept him from targeting sugar mills, a majority of which are owned by leaders of these two parties. At the same time, Shetti has strongly criticised the BJP leaderships in both the state and the Centre, accusing them of not being adequately sympathetic to the cause of the farmers. The farm crisis and farmers’ issues are likely to play a major role in the coming Lok Sabha elections, and the BJP would be worried about the direction the sugarcane growers’ agitation might take.