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    From Tehelka Magazine, Vol 9, Issue 48, Dated 01 Dec 2012
    CURRENT AFFAIRS  
    MAHARASHTRA

    This sugarcane season, crush the farmer

    Sugarcane mills owned by political bigwigs are squeezing the farmers for profits, reports Sai Manish

    No respite Policemen rain blows on a Shetkari Sanghatana activist in Karad

    Photo: PTI


    ON 17 NOVEMBER, when local and national television channels competed to mourn for Bal Thackeray’s death, the village of Vasagade in western Maharashtra — a region touted as India’s sugar heartland — begged to differ. Unimaginable as it may be to Thackeray apologists, posters reminding of the ‘martyrdom’ of Chandrakant Nalwade in a police firing competed with banners of Thackeray on the highway connecting Vasagade to the rest of the country.

    Nalwade, a sugarcane farmer, joined other agitating farmers on 13 November across Sangli and Kolhapur districts to demand that cooperative sugar mills controlled by a gang of Congress-Nationalist Congress Party (NCP) politicians pay them a price of Rs 3,000/tonne of sugarcane instead of the current rate of Rs 2,300/tonne.

    What they got in response were police bullets, which killed Nalwade and injured many others. In addition, several youth from Ashtha and other villages in Sangli were picked up and booked for attempt to murder.

    “The injured cop is walking around with a bandage on his foot after we hit him with a stone. How is that an attempt to murder? For that, they picked up 40 of our boys,” reveals Amol Patil, a farmer from Ashtha. “Politicians like Sharad Pawar and Jayant Patil are using the state machinery to protect their business interests.”

    The anger is palpable across the sugar belt as more farmers are increasingly feeling betrayed by the politicians who head cooperative sugar mills but transact business in a manner that undercuts the objective of risk and revenue sharing that is the foundation of the cooperative movement. At the centre of the discontent is the changing nature of the cooperative movement, which is now increasingly becoming oppressive to the farmer owing to a convergence of political and business interests in this sector.

    It’s not the just the sugar lobby but also the emergence of the ethanol cartel that is proving detrimental to the farmers’ interests, reducing sugarcane producers to mere slaves servicing the factories of these powerful men. So, who are these farmers up against? Here is a lowdown on the people who control the sugar-ethanol lobby in the state, most of them belonging to the ruling Congress-NCP alliance.
    • Union Agriculture Minister Sharad Pawar reportedly owns seven cooperative mills around Baramati through his relatives, including his nephew, and is termed by farmers as having “lost his mind in the corridors of power”
    • Maharashtra Finance Minister Jayant Patil (NCP) owns three sugar mills in Sangli district and is considered a “villain” by the farmers
    • Former home minister RR Patil (NCP) owns a cooperative sugar mill in Tasgaon
    • Union Minister of State for Coal Pratik Patil (Congress) owns the Vasantdada Cooperative Sugar Mills in Sangli. The factory’s operational inefficiency and shady finances have been highlighted by the CAG
    • Congress strongman Patangrao Kadam owns a massive cooperative sugar mill in Kodegaon of Sangli district
    • The ethanol lobby too has Pawar heavily entrenched along with a host of other politicians. Baramati Agro Ltd, based in Indapur near Pune, is headed by Pawar’s nephew Rajendra Pawar
    • Jayant Patil is the chairman of Rajarambapu Patil SSK Ltd in Sangli district, an ethanol producing unit that supplies raw materials for manufacturing IMFL to companies such as Shaw Wallace
    • Then there is Pawar’s close aide Babanrao Vitthalrao Shinde, the NCP MLA from Madha, who controls the Vitthalrao Shinde SSK Ltd, which has the capacity to produce 30 kilolitre per day (KLPD) of ethanol and liquor
    • Congress leader and former chief minister Ashok Chavan, who was forced to step down after the Adarsh scam, is the chairman of Bhaurao Chavan SSK Ltd in Nanded
    • The most prominent non-Congress, non-NCP face of this lobby is none other than BJP chief Nitin Gadkari, whose company Purti Power and Sugar Ltd in Nagpur is listed as an ethanol producer with a capacity of 12 KLPD

    Cane of worms

    PAST TENSE Cane arrears from the previous crushing season are still due and farmers are being given artificially depressed prices to cover up for the inefficiency of the mills

    NO FRINGE BENEFITS Benefits that accrue to farmers on account of being shareholders in the cooperatives — like 5 kg sugar per month at half the market rate and allowances for cutting the cane and transporting it to the factories — have been stopped by the mill owners for 10 years now

    PASSING THE BUCK Sugar mills deduct transportation and cutting costs from the Statutory Minimum Price paid to farmers even though it is the mills’ responsibility to bear these expenses

    LOSING THE PLOT Cooperative sugar mills deliberately sell sugar at less than the levy price and export it below the market price to show losses

    BYPASSED AGAIN The price given to a farmer is based on the amount of sugar recovered from a tonne of cane. But cane has several byproducts — bagasse for producing power, molasses for spirits and press mud for bio-compost — all of it sold by the mills without passing on the benefit to the farmers.

    The strength of this lobby, as is evident by the powerful names that comprise it, dictates the remuneration of farmers based on the expediency of their balance sheets. Most farmers complain that “cane arrears” from the previous crushing season are still due and they are being given artificially depressed prices to cover up for the inefficiency of these mills.

    Benefits that accrue to farmers on account of being shareholders in these cooperatives — like 5 kg sugar per month at half the market rate, and allowances for cutting the cane and transporting it to the factories — have been stopped by the mill owners for 10 years now.

    IN A damning report last year, the CAG had said that sugar mills were actually deducting transportation and cutting costs from the Statutory Minimum Price (SMP) paid to farmers even though it was their responsibility to bear these expenses. In addition, cooperative sugar mills constantly ran up bad debts and were later sold off by the Maharashtra State Cooperative Bank to private companies without consulting the state government, which had used public money to set up their infrastructure.

    Moreover, cooperatives were deliberately selling sugar at less than the levy price and exporting it below the market price to deliberately run losses. However, the CAG stopped short of pointing out who exactly were the beneficiaries of the under-priced sugar, even though it meant that farmers were being left unpaid and the annual reports of the cooperatives were mostly in the red.

    To counter the sugar lobby, farmers across the region joined hands to form the Shetkari Sanghatana, which is led by various farmer leaders, the most notable being Raju Shetty. Shetty is a marginal farmer and an independent MP from Hatkanangale, who was arrested for instigating unrest during the recent agitation. “One note. One vote. We all contributed money and made Shetty fight and win the 2009 General Election. It was in our interest because the politicians who control the mills betrayed us,” says Rajkumar Patil, a farmer from Kur village in Kolhapur district.

    Highway to hell Sugarcane farmers block a road in Kolhapur in a bid to highlight their plight

    Photo: Deepak Salvi

    When the farmers’ unrest was threatening to spill over to Pune division, Pawar made a casteist barb saying that the agitation was only for the Jains and not the Maratha farmers (Raju Shetty is a Jain). “It was a cheap tactic,” says Ajay Ananda Kokate of Shetkari Sanghatana. “The farmers are united and have never been divided along caste lines. As the godfather of the sugar lobby, Pawar should at least know that. There are only two castes in this fight: the farmers and the politicians who own sugar mills and suppress our rights.”

    Pawar’s jibe was also condemned by BJP leader Gopinath Munde and Shiv Sena’s Diwakar Raote, who accused him of trying to drive a wedge between the protesters.

    The defining point of this agitation that has sent shivers down the spine of the sugar- ethanol lobby is the demand for making the farmer a beneficiary of the ever-expanding value chain of sugarcane byproducts. Farmers have started realising that the cane produced in their fields has a value much greater than just the sugar produced from it. Every single part of the sugarcane is used — bagasse for producing power, molasses for spirits and press mud for bio-compost.

    At the moment, the price of sugarcane given to a farmer is based on the amount of sugar recovered from a tonne of cane. With glaring inefficiencies, as pointed out by the CAG, and with political-business interests at play, farmers often end up getting a raw deal, pushing them to the edge of violence like the one witnessed last week. This realisation is still at a nascent stage and is likely to grow exponentially, as TEHELKA found out while talking to farmers in the sugarcane belt.

    A committee headed by C Rangarajan, which was appointed by Prime Minister Manmohan Singh, submitted its report on the regulation of the sugar sector on 5 October. The report, under consideration of the PMO, asserts that given the rising input costs, farmers need to be given at least 70 percent of the value of the byproducts derived from sugarcane.

    “It would be fair to share the revenue pot of value created in the sugarcane value chain between the farmers and millers in the ratio of their relative costs,” states the report. “An analysis of the costs incurred by sugarcane farmers and those incurred by sugar mills suggests that this ratio between farmers and millers, taking a recovery rate of 10.31 percent, works out as 70:30. This value-sharing ratio should apply not only for the revenue generated from sugar but also to that generated from saleable primary byproducts. Therefore, it is suggested that 70 percent of the value of sugar and each of its three major byproducts, namely bagasse, molasses and press mud, be fixed as the cane dues payable to the farmer for the cane supplied.”

    If this recommendation is implemented, it would enable the farmer to get a true value of the cane that he produces on his land. The past two committees on the control of the sugar sector — Tuteja Committee and Thorat Committee — presented their reports to none other than Pawar himself. None of their recommendations saw the light of day. However, Rangarajan is the chairman of the prime minister’s Economic Advisory Council and counts only Manmohan Singh as his boss.

    The bigger question is: how hard will Pawar and Co play with the PM to maintain the status quo and keep the farmer perpetually ‘bonded’ to the sugar lobby.

    Sai Manish is a Senior Correspondent with Tehelka.
    sai.manish@tehelka.com


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    From Tehelka Magazine, Vol 9, Issue 48, Dated 01 Dec 2012
 
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