People's Democracy

Free Market Policy Leads to Sugar Crisis

THROUGH a statement issued from New Delhi on November 30, 2013, the All India Kisan Sabha (AIKS) strongly demanded that the UPA government take immediate steps to resolve the ongoing sugar crisis prevailing in the sugar producing states.

In this regard the AIKS has suggested some immediate measures which it said the government must take;

1) Reverse the implementation of Rangarajan committee recommendations.

2) Enhance the import tax on sugar to 40 percent from the current 15 percent in order to arrest the cheap import of sugar by traders and refineries.

3) Ensure that the sugar mills start crushing operations at once and clear the arrears to the tune of Rs 10,500 crore which they owe to sugarcane farmers.

4) Ensure that all states declare an amount not less than Rs 3,600 per tonne as the state administrative price (SAP) of sugarcane.   

The AIKS also expressed pain and grief over the suicide of Sathypal Singh (40), an indebted sugarcane farmer of Bastholi village in Lakhimpur-Kheeri district of Uttar Pradesh on November 28. Another sugarcane farmer, Vitthal Bhimappa Arabhavi, aged 60, committed suicide a day earlier, on November 27, at a protest rally by farmers in Belgam district of Karnataka. The farmers were then demanding remunerative price and payment of arrears. The AIKS pointed out that widespread agitations by sugarcane farmers are continuing in different parts of the country but yet the government is not ready to address the severe plight of these farmers. The AIKS strongly demanded that the UPA government declare a compensation of Rs 10 lakh for the bereaved family of each suicide victim.

The AIKS also pointed out that in Uttar Pradesh alone, arrears amounting to as high as Rs 2,400 crore have been pending for the last one year and that only 31 mills out of 123 are operating and procuring sugarcane from farmers. The UP unit of AIKS has called for a Rasta Roko agitation on December 4 to press the demand of remunerative SAP and clearance of all pending arrears to farmers by sugar mills.

The AIKS has urged upon all the agitating farmers to undertake widespread public agitations against the free market ‘reforms’ which include deregulation of sugar and promotion of import of sugar by the UPA government that have led to the current sugar crisis.  

Through another statement issued a day earlier, on November 29, the AIKS said that it was the deregulation of sugar and the import of 17 million tonnes of sugar from other countries by the sugar traders and refineries in the current financial year which led to a fall of the sugar price from Rs 36 to Rs 26 per kg in the domestic wholesale market. However, this has hit the cane growers still harder.

The fact is that sugarcane farmers are at the receiving end and forced to agitate for remunerative price in the sugar producing states like Uttar Pradesh, Maharashtra, Tamilnadu, Karnataka and Andhra Pradesh. This is evident from the abovementioned suicide of Vitthal Bhimappa Arabhavi, a marginal farmer, whom the Nirani sugar factory failed to pay for the 120 tonnes of cane he had supplied last year.  

Despite the continuously demand raised by farmers’ organisations and leaders of the sugar industry, the government has not been willing to enhance the import tariff on sugar to 40 percent from the current 15 percent. The reason is the government’s eagerness to carry forward the process of so-called economic reforms including the deregulation of all commodities to facilitate free market. The AIKS said the economic policy of the UPA government has been the major reason for the agrarian crisis prevailing all over the country today. While the production cost is shooting up day by day, the prices of agricultural commodities in wholesale markets are falling down, pushing the peasant families more and more into severe indebtedness and miseries. Around Rs 10,500 crore is the value of the arrears the sugar mills owe to sugarcane farmers in the major sugar production states. It is also to be noted that a majority of these private mills are owned by politicians turned businessmen who belong to either the Congress or the BJP. 

The AIKS has therefore demanded that all the state governments declare not less than Rs 3,600 per tonne as state administrative price (SAP) and ensure the immediate payment of arrears. The AIKS has asked all its units to strengthen the ongoing struggles by joining hands with all likeminded peasant organisations and fight against the anti-farmer policies of the Congress led UPA government.