Sugar Mills Owe Farmers Rs 24,000 Crore Even As 2018 Production Increased By 6.7%
Sugar mills enjoy the full patronage of political parties, but the benefits are not passed on to the farmers.
Sugar mill owners owe a whopping Rs 24,000 crore to sugarcane farmers across the country. The industry which employs around 50 million farmers and 2 million mill workers is running on assurances of payment and sheer luck.
NewsClick reported that per the Indian Sugar Mills’ Association, the total production of sugar increased by 6.7 per cent till December 31, 2018. About 110.52 lakh tonnes of sugar was produced by 501 mills till December 31, 2018, compared to 103.56 lakh ton sugar made by 505 mills till December 31, 2017.
The surplus in production comes despite Maharashtra crops being affected by rainfall and white grub infestation. Early crushing of the cane across Maharashtra and Karnataka contributed to the surplus production this year.
Uttar Pradesh contributes 36.1 per cent of the country’s total production, followed by Maharashtra (34.3 per cent) and Karnataka (11.7 per cent). All three states together make up for 82.1 per cent of India’s total production.
Sugar cane dues in Uttar Pradesh reportedly amount to more than Rs 10,000 crore. Around 117 sugar mills are operational in the state, which crushed 286 lakh tonne cane to produce 31 lakh ton sugar till December 31, 2018.
In Maharashtra Rs, 4,700 crore is owed to sugar farmers. The latter was supposed to receive around Rs 15,600 crore as per the fair and remunerative price (FRP). Around 184 mills produced 43.98 lakh ton sugar till December 31, 2018.
Karnataka owes about Rs 3,990 crore to sugar cane farmer as of 2018-2019. 63 Karnataka mills produced around 20.45 lakh ton sugar till December 31, 2018.
In Tamil Nadu, the Tamil Nadu Sugarcane Farmers’ Association recently urged the state government to make sure that Rs 1,854 crore worth of dues are settled with interest.
T Ravindran, general secretary of the association said in a statement, “Sugar mills have also been cheating on the profit-sharing formula. Between 2004 and 2009, they should have shared Rs 240 crore with the farmers. The association went to court and won the case, and the court said the profit share had to be disbursed by February 13, 2019. But despite giving representation to the state government to ensure the court direction is complied with, no action has been taken so far.”
Farmers left out of the equation:
Unlike the farmers, the sugar mills have been enjoying the full direct support and benefit from the government. Despite this, the benefits have not passed on to farmers as they await timely payments for their produce. In February 2019, the Centre had sanctioned soft loans worth Rs 10,540 to sugar mills to help them clear the dues owed to sugar cane farmers.
In June 2018, to compensate for the crashing sugar prices for the unprecedented rise in production, the government had sanctioned Rs 8,500 crore for sugar mills including a soft loan of Rs 4,440 crore to create ethanol.
The mills were also provided cash assistance of Rs 138.8 per ton, amounting to Rs 4,100 crore in total.
The nexus between political parties and mill owners is evident, as of the total 180 defaulting sugar factories in Maharashtra, 77 are owned by BJP leaders, 53 by National Congress Party leaders and 43 by Congress leaders. People close to Shiv Sena owns the remainder, says Swabhimani Shetkari Sanghtan (SSS).
Between 2008 and 2014, around 39 cooperative mills in Maharashtra were sold and most had ended up with BJP, Congress and NCP leaders.
Raju Shetty of the SSS reportedly said, “Who do farmers turn to for justice when the ruling party leaders are the biggest defaulters? State Cooperation Minister Subhash Deshmukh’s sugar factory has pending FRP arrears of Rs 104 crore, while Rural Development Minister Pankaja Munde’s factory has Rs 64 crore in FRP arrears.”