People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 49

December 06, 2009

The Issues of Sugarcane Growers


                                                                   N K Shukla


A large number of sugarcane growers, particularly from western Uttar Pradesh marched to parliament on 19 November and forced the central government to reconsider its decision to do away with SAP (State Advised Price) of sugarcane. Though the rally was called by Lok Dal leader Ajit Singh, a good number of participants were general cane growers, who have been agitating for fair price of their sugarcane and also for the payment of huge arrears pending with various sugar mills. Leaders of  nearly all the main opposition parties addressed the agitating farmers. Basudeb Acharia, CPI(M) leader in Lok Sabha addressed the rally. On behalf of All India Kisan Sabha, N K Shukla and Vijoo Krishnan were present.


It is to be recalled that  the cane growing farmers are agitating  throughout the country for fair price of, since the month of Sepember, which is the  beginning of the season. The AIKS units have been organising conventions, deputations, demonstrations, dharnas and padavs before the sugar mills and in cane growing districts of different states, particularly in Uttar Pradesh.


The agitation had gathered momentum after  21 October  because government of India on this date promulgated an Ordinance called Essential Commodities (Amendment and Validation) Ordinance 2009  which replaces the SMP ( Statutory Minimum Price ) by Fair and Remunerative Price of Sugarcane. This ordinance also did away with clause 5A of Sugar Control Order of 1966, which means that the sugar mill owners are now not obliged to share their profit with the cane supplier farmers. By the said ordinance the central government favoured the sugar mills by freeing them from paying any SAP. The central government also announced that any SAP decided by  any state government will have to be paid by the state government themselves. This is despite the fact that the Supreme Court has already upheld the system of obligatory payment of SAP along with SMP.


After the massive protest by the cane growers on 19 November, the government of India has assured to retain the  provision of SAP (to be paid by mill owners) but the demand of retaining 5A of the Sugar Control Order  1966 (to share the profit with farmers) is still pending.


Now coming to the price of Sugarcane for current year, the central government has decided Rs 129.84 per quintal as FRP for 2009-10.This meager  price announced by the government will not satisfy the demands of the farmers even if some SAP  is added by the  various state governments. The whole system of sugarcane pricing  has been unpractical, favouring the sugar mills and is against the interests of cane growers. The central government has unilaterally announced the    sugarcane prices without consulting the farmers´┐Ż organisations, sugar mills and the concerned state governments. According to the recommendations of the National Commission for Farmers headed by Dr Swaminathan, the support  price of  any crop should be fixed at C2 +50 percent margin(double the production cost plus 50 per cent of the cost as margin/profit). Based on this formula, the CACP calculated Rs 101.32 per quintal as  the average all India cost of production of sugarcane for 2008-2009. If this cost price is doubled and the risk factor of 10 per cent, the transportation charges  and the margin of 50 per cent  is added , the actual fair and remunerative price (FRP) will not be less than Rs 250. Besides, the sugar mills are earning profit also by using molasses for breweries and other byproducts for paper mills or for fuels. In some of the states, cane growers are not allowed to sell their canes to mills other than those in their circle area and also not to the crushers.


It is to be noted here that the abnormal increase in the market price of sugar in recent months has nothing to do with the price of sugarcane paid to the cane growers last year, which was around Rs 125 to 130 per quintal as an average. In the last one year, the sugar price has almost doubled but that profit is not shared with the cane growers. Moreover huge arrears are still pending with various mills.


The step motherly treatment meted out to cane growers for years has forced the farmers to withdraw from sugarcane cultivation in recent years. It has been estimated that the area of sugarcane growing declined from 5.04 million hectares in  2007-08, to 4.38 hectares in 2008-09 and to 4.26 million hectares  in 2009-10. Consequently the sugar production in our country declined from approximately 30 million tonnes to  15 million tonnes in one year. This means that now the production  is less than the average  demand for sugar in our   country which is  around 23 million tonnes at present. But the present high increase of sugar price is not due to the decline in acreage of sugarcane cultivation but due to speculation, hoarding  and black marketing, which the government committed to neo-liberal policies is unable to control.



The central government has no right to play with the lives of    either cane growing   farmers or with the  general consumers. In this situation, the cane growing farmers have no other option but to  fight for  real  remunerative  price and  the consumers have to fight for  fair price of sugar, while supporting the genuine  and  just demands of  sugarcane growers.