New Delhi: Monu Choudhary owns an eight-acre plot of land in Sardhana, on the outskirts of Meerut, where he, like most other farmers in the region, grows sugarcane. He has an outstanding loan of Rs 2,75,000 on his Syndicate Bank kisan credit card, which isn’t eligible for the Uttar Pradesh government’s much publicised loan-waiver as Choudhary doesn’t fit in the category of a small or marginal farmer. The last time he payed a monthly instalment on his loan was June 2017.
“When we got payment from the sugar mill last year, we paid the instalment. But this season, sugar mills have not been paying on time. I am yet to receive Rs 3,50,000,” Choudhary said.
“Ghar bhi to chalana hota hai. Sara paisa hum fasal mein laga dete hain. Ab uska daam bhi waqt pe nahi milega to khayenge kya? (Our house also has to function. We invest all our money in the crop. Now, if we do not even get payment on time, what will we eat?),” asked an exasperated Choudhary.
The problem faced by Choudhary is being faced by most sugarcane farmers across the state due to pending sugarcane dues. As per the Cane Development and Sugar Industry Department (CDSID) in Lucknow, the pending dues as of April 4 were Rs 8,108 crore – 30% of the total amount due.
However, that number is misleading. The CDSID of the UP government only treats payments due longer than 14 days as ‘payments due’. So the difference between the total value of sugarcane procured by sugar mills in the state and the value of payment made to farmers will be different from the Rs 8,108 crore mentioned as ‘pending dues’.
On request, the CDSID provided the two above mentioned figures. The total value of sugarcane procured for the 2017-18 season in UP as on April 4 was Rs 29,101 crore and the total payment made was Rs 18,272 crore. The difference, and arithmetically the total amount due, thus, is Rs 10,829 crore – 37.2% of the total value of sugarcane procured.
“Dues have gone on mounting. In the coming days, they will touch Rs 11,000 crore and by the end of the season could increase much more,” said Pushpendra Singh, president of the Kisan Shakti Sangh.
Sugar mills claim that their ability to pay farmers has been hampered by low sugar prices. The Indian Sugar Mills Association (ISMA) recently said that the average wholesale prices of sugar stood at Rs 3,000 per quintal – Rs 500 below the cost of production. Sugar prices remain low due to the excess production of sugar in the current season. According to ISMA estimates, sugar production in India during the 2017-18 season will touch 29.5 million tonnes, which is a 45% increase over production last year.
Credit: Reuters/Danish Siddiqui/File photo
In its effort to deal with the problem, the Central government had announced on March 28 a mandatory export of 20 lakh tonne of sugar under minimum indicative export quota. However, according to ISMA, due to depressed global sugar markets, the move is unlikely to solve the problem.
Jeetender Hooda is a sugarcane farmer in Shamli who still has standing crop on his farm and is contemplating the way forward in light of delayed payments from sugar mills. “Mills already owe me Rs 1.5 lakh for this season. Now, I need cash urgently. If I sell my standing crop to the mill, I don’t know when I will get payment,” said Hooda.
Hooda is now considering selling the remaining sugarcane at the local jaggery producing units, or kolhu. “The price is much lower at Rs 270-280 per quintal (The assured price for sugarcane in the sugar mills is Rs 315 per quintal). But I will get cash immediately, unlike if I sell to sugar mills,” Hooda explained the quandary that he finds himself in.
Kuldeep Tyagi of the Bhartiya Kisan Andolan, a farmer’s organisation in Western UP, argues that the government is to blame for the current situation. “Early in the season, the government has estimates of sugarcane production based on the area under cultivation. Those estimates are there precisely to help the government plan in advance. But there is no planning and farmers have to suffer,” he said.
An undelivered promise
“And during the election campaign, the BJP promised that they will ensure that payment is made within 14 days. What happened to that promise? Farmers are not being paid even after 3-4 months,” Tyagi added.
One of the BJP’s key election promises before the 2017 UP assembly elections was the assurance that if it is voted into power in the state, it would ensure that sugarcane farmers are paid within 14 days of selling their crop. It was a rather ambitious promise at any rate, and especially since a significant proportion of sugar mills in the state are privately owned.
As the pending sugarcane dues mount each day, local BJP leaders, particularly in the sugarcane belt of western UP, are a worried lot. “It is a major worry for us. Sugarcane dues have been mounting steadily. In this region, sugarcane payment is a huge issue,” said Laxmikant Bajpai, former BJP state president and four-time MLA from Meerut.
“But I am sure that the government has taken note of this and is devising a strategy to deal with the situation,” Bajpai added.
A BJP MLA from the sugarcane belt of western UP feels ‘shame’ when travelling to his constituency. “Kya muh leke jayen wapas? Sharm aati hai (It gets difficult to show my face in the constituency. I feel ashamed). Almost every farmer in my constituency grows sugarcane and everyone is agitated due to delayed payments,” said the ruling-party MLA.
“It is true that our government hasn’t been able to deliver on its promise. It was a very unrealistic promise anyway. But the situation should, at least, have been better than under previous regimes. Even that hasn’t happened,” he added.