Jagmer Nirwal, a farmer from Shamli who holds the record of harvesting UP’s highest cane yield of 1,989.5 quintals/hectare. Shamli sugar mill. (Express Photo: Praveen Khanna)
It used to be one of India’s most prosperous agricultural tracts, irrigated by the Eastern Yamuna and Upper Ganges canal systems built way back in the 1850s. In August-September 2013, one of its districts was the site of a communal conflagration. More recently — this time, barely a year before Assembly polls in Uttar Pradesh — another one has been in the news for the alleged palayan or mass exodus of Hindu families from Muslim-dominated areas.
But UP’s Upper Doab belt —the fertile alluvial plains between the Yamuna and the Ganga stretching from Saharanpur through Shamli, Muzaffarnagar, Baghpat and Meerut to Ghaziabad, Hapur and Bulandshahr — is today gripped by an unprecedented agricultural crisis centered around sugarcane and bhugtan (payments) to growers by mills. This issue, more than palayan or Hindu-Muslim polarisation, could be the real game-changer, at least in the region’s 30-plus Assembly seats out of the state’s total 403.
UP has some 30 lakh farming families who supplied a total 6,428.49 lakh quintals of sugarcane to mills during the recent 2015-16 crushing season. This cane was worth Rs 17,999.37 crore at the UP government’s state advised price (SAP) of Rs 280 per quintal.
The SAP has not just been unchanged since 2012-13; for the current season, the Samajwadi Party administration even allowed it to be paid in two instalments. The first instalment of Rs 230 was payable within 14 days of the cane being delivered to the factory and the balance Rs 50 within three months after completion of crushing (mills normally start operations in November and close by April-end).
Data from the Cane Commissioner’s Office in Lucknow, however, reveals mills to have, as on June 21, made payments of only Rs 13,193.60 crore. It means they still owe growers over Rs 4,800 crore. Worse, there are dues of Rs 1,631.08 crore even against the first instalment of Rs 230/quintal payable within 14 days after cane purchase.
Shamli sugar mill. (Express Photo: Praveen Khanna)
“It’s like not having a salary raise for three years and even this not getting paid,” says Jitender Singh Hooda. This 45-bigha (7.6 acres) farmer from Kheri Bairagi, a village in Shamli tehsil/district, has received only
Rs 1.44 lakh for his 1,200 quintals supplied to the sugar mill of Sir Shadi Lal Enterprises Ltd, as against its SAP value of Rs 3.36 lakh.
The cane payment crisis is, indeed, most acute in the Upper Doab region, also referred to as ‘Jat belt’ after the community that is seen to make up roughly a tenth of its population and a third of those engaged in farming. The Upper Doab districts, as the accompanying table shows, currently account for more than 47 per cent of the overall cane dues and 80 per cent of first-instalment arrears owed by mills in UP.
“Many assume we are a rich and powerful farming community. They should come here and see the reality. We may have once produced big leaders like Chaudhary Charan Singh and Mahendra Singh Tikait, but the fact is that our voice matters little today. Why else is the cane arrears position the worst here?” points out Rajvir Singh Mundet, a Shamli-based social worker and convenor of the Bharatiya Kisan Mazdoor Sanyukta Morcha.
The average Upper Doab farmer, according to him, owns 15 bigha (nearly one hectare or 2.5 acres) and “not even 10 per cent has more than 30 bigha (five acres)”. Sugarcane cultivation was, in the past, remunerative for even small farmers, as they had access to irrigation and mills made regular payments.
This is no longer the case with further fragmentation of holdings and cane payment arrears becoming a serious problem, especially since around 2013-14. “Sugarcane alone can no longer support one’s family. So, you see many Jat farmers taking to sale of milk and even working in factories, which they never used to do until a couple of decades ago,” explains Mundet.
The small farmers have been impacted the most. Many sent their children to private schools, realising the need of diversifying career options.
Towns like Shamli saw a mushrooming of such schools catering to farmers’ children — especially during the period from 2007-08 and 2012-13, when the cane SAP also rose from Rs 125 to Rs 280 per quintal. But with stagnant SAPs and delayed payments over the last three years, there is a growing trend of school fee defaults.
Jagmer Singh Nirwal, who farms 300 bighas (50.5 acres) in Shamli’s outskirts, reckons his average cane cultivation cost at Rs 8,000 per bigha. At 60 quintals yield per bigha (i.e. 880 quintals/hectare) and the SAP of Rs 280 per quintal, the gross return works out to Rs 16,800 per bigha. Deducting costs of Rs 11,000 — including Rs 35/quintal towards harvesting and Rs 15/quintal for transporting the cane to the mill — leaves a net return of Rs 5,800 per bigha. This is decent, provided the money comes on time though.
Nirwal is a relatively big farmer, who also holds the state record of harvesting 1,989.5 quintals per hectare in 2014-15 (the average cane yield for UP was 651.48 quintals, while 788.44 quintals for Shamli district).
But he, too, has so far been paid only Rs 4 lakh for 8,000 quintals that should have been worth some Rs 22.4 lakh at the SAP: “I am surviving only because of the profits from earlier years. Ordinary farmers do not have this luxury”.
Most farmers understand that a major factor for delayed payments has to do with sugar prices, with average ex-factory realisations in UP plunging from Rs 31.90 to Rs 25.64 per kg between 2012-13 and 2014-15.
“But they should at least pay us now, when prices have gone up”, notes Hooda. From a low of Rs 22.54/kg in July 2015, average realisations have, in fact, recovered to Rs 33.70 in May. This has led to some companies — notably DCM Shriram, Balrampur Chini, Dwarikesh Sugar Industries and Dalmia Bharat Sugar — paying 85 per cent or more of their SAP value of cane.
“Central and eastern UP mills are seemingly keen to pay, unlike the ones here. The state government is least bothered about western UP farmers, while politicians are only interested in raising palayan and other issues to divert attention”, alleges Mundet.
Cane growers fear that if sugar prices keep rising, the Centre will next open the door for duty-free imports. “We suffer when prices fall from over-production. We will also suffer if prices go up and imports take place,” complains Hooda.