news Friday, June 26, 2015 - 05:30

Image for representation purpose only Sixty-year-old Ninge Gowda harvested a bitter crop this year. He set his sugarcane field ablaze and jumped into his own pyre. Owning just half an acre of land in Pandavapura taluk in Mandya district, Ninge Gowda is one of millions of India’s marginal farmers. He had no money to hire labourers to harvest the standing crop. Unable to bear the harassment from money lenders, he took his own life. Three farmers in the state – one each from Srirangapatna, Mandya and Kalaburagi – have committed suicide in the last 48 hours as the price for sugarcane produce has fallen drastically in the market and therefore are unable to repay the loans. A multi-pronged crisis For the last one year, farmers’ organisations have been demanding that the government fix a better base price or Fair and Remunerative Price (FRP) for sugarcane growers. Managements of sugar factories have not paid the farmers and are quoting low prices, adding to their woes. President of Karnataka Prantha Raitha Sangha Krishne Gowda TL says their predicament is manifold. Input costs – prices of fertilizer, seeds, pesticide – have escalated. He also says obtaining loans from banks and co-operative societies is difficult for two reasons: banks have targets which they meet by providing loans to agri-businesses, and because it is a time-consuming process which is unsuitable for farmers who need access to quick credit. Because of this, farmers are forced to turn to private money lenders who charge interest anywhere between 30% and 60%. For some perspective, consider this: interest rates for car loans range between 10-20 % for up to Rs. 50 lakh and Ninge Gowda had borrowed Rs 1.6 lakh rupees. Unpaid dues Even if Ninge Gowda had harvested his crop, it is very likely that the crop would have fetched pittance, if at all it was paid for. Karnataka has around 60 sugar manufacturing factories which currently owe farmers around Rs 1,000 crore for produce sold over a period of two years. Dues have been unpaid despite the Karnataka Sugarcane (Regulation of Purchase and Supply) Act, 2013, mandating that growers be paid within 14 days. Gowda says he has sold 100-120 tonnes of sugarcane grown on his three-acre land, but he is yet to see any money. He is currently managing household expenses from his wife’s salary, he says. Even if he is paid, it will not be enough to cover input costs. “Currently the price for sugarcane is Rs. 2000-2500 per tonne which is a low price, considering all factors it should be Rs. 4000 per tonne,” Gowda says. Why aren’t factories paying farmers? But sugar factories too are in trouble. Manager at Hemavathi Sugar Factory in Hassan district Nagaraj says that the price of sugar has fallen below that of sugarcane, so paying farmers what they were demanding was not feasible. He says that the price quoted for one quintal of sugar for 2014-2015 was Rs. 2,200 whereas the FRP for sugarcane (the main raw material) was Rs. 2,230. Besides these, factory owners have to bear overheads – rising production costs including that of raw materials and pay employees’ salaries. Factories generally make a deal with sugarcane growers during the sowing season, fixing a price and the quantity to be purchased. Therefore, factories cannot back out during the harvest season even if the demand is low and prices have fallen. Issue of overproduction The core of this quagmire is government policy, which has neither given adequate guidance and assistance to farmers, nor balanced supply and demand. According to the Union Ministry of Agriculture’s Commodity Profile for Sugar-June 2015, the production of sugar rose by 2.63 percent in the last 10 years as did sugarcane production by 2.40 per cent. India is the second highest producer of sugar in the world after Brazil. Despite this, India imports sugar. Almost all sugar imports for the year 2014-15 – 99.6 percent – came from Brazil, the commodity profile shows. In contrast, demand in the domestic market however remains low. As a result, says Nagaraj, there has been a surplus production of 300 million tonnes in 2014-15 which remains unsold. But the previous year’s (2013-2014) surplus too is yet to be sold. Gowda says sugar factories are unwilling to pay farmers until they sell the unsold stock. “The government has to bail them out by lending loans so that they can pay us, or the government must buy the sugar and hand over the money to farmers directly,” he says. Krishne Gowda and Nagaraj both acknowledge that farmers are aware that there is over-production of both sugarcane and sugar in the country. It is evident that little is being done to address it. “Ours is a liberalised economy with no mechanism to direct farmers to grow a particular crop. Hence, outputs vary each year. Let the government declare that sugar and sugarcane are in surplus in the market hence should not be grown, then we will not invest in it,” says Krishne Gowda. But it is easier said than done, and Krishne Gowda explains: “It’s like asking a woman used to cooking rice-sambar-chapati to cook Chinese the next day.”  

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