Maharashtra’s ongoing cane agitation is less about prices and more about breakdown of trust between mills and growers.
Sugarcane and milk farmers are on a warpath today in different parts of India. In Maharashtra’s Satara-Sangli-Kolhapur belt, the agitation by cane growers demanding a first instalment price of Rs 3,000 a quintal – as against the Rs 2,200-2,500 final rate they got last year – has led to even police opening fire on irate mobs. Milk producers haven’t reacted as violently, but are getting restive about dairies either not buying or reducing procurement prices anywhere from Rs 2.50 in Karnataka to Rs 5 a litre in the North over the past few weeks. While the proximate cause of the above tensions may be prices, what they highlight equally is a breakdown of trust, such as there was, between farm produce suppliers and processors, which holds particular importance in the context of the sugar and dairy industries.
Sugarcane and milk, unlike wheat or cotton, are perishable commodities that cannot be bought from mandis, for stocking up when prices are low and processing for sale only when realisations go up. They are also products with long gestation periods. The plant cane sown today is harvestable only after 10-11 months. Likewise, a young buffalo heifer takes 45-odd months to calve and start giving milk. If a sugar mill defaults on cane payments, growers would switch over to other crops. In the event, the factory will go without cane for an extra 10-11 months, compromising its viability. The same goes for milk, where higher prices received in recent years have induced farmers to invest in new animals and rear calves. These have now begun yielding plenty of milk, resulting in the current glut-like situation and crash in prices. If it persists too long, the same farmers may prefer sending their buffaloes to the slaughter house, rather than milking them or raising more heifers. That would, then, impact future milk availability and prices to the detriment of dairies and consumers alike.
All this only emphasises the relation of trust between producers and processors, which is clearly missing today in Maharashtra, despite most sugar mills being cooperatives ostensibly owned by growers themselves. While the cooperative structure is theoretically more amenable for reconciling the seemingly contradictory goals of the two sets of stakeholders – one wanting higher and the other seeking lower price for farm produce – what we see now is rising confrontation spilling over into violence. The point is not whether a cane price of Rs 3,000 a quintal is high or reasonable. It is the virtual collapse of institutional arrangements for negotiations – giving just the excuse for governments and rabble-rousers to intervene in matters that are for the mills and the growers to directly sort out – which is most disturbing. Just as mills and dairies cannot do without cane or milk, for farmers too, the viability of these industries is in their own interest. Communicating this simple message shouldn’t be difficult.
Keywords: Maharashtra’s cane agitation, breakdown of trust, mills and growers, reducing procurement prices
Comments:
(1) Both the Congress and NCP, two parties now in power in
Maharashtra, are guilty of creating present situation of lack of
trust. While farmers (sugar-cane growers) may be technically owners of
the co-operative sugar mills, in practice these mills have been very
widely used as political vehicles and for making money.(2) Not all
farmers are affected by the dispute between the mills and farmers; the
rich one are well connected to the group which controls the management
of mills and their interests are protected in some way or the other.
(3) In case of milk too, setting up a primary milk producers’ co-
operative is essentially a political activity. (4) Those in control of
management of the federations of co-operative milk producers’ unions
are often accused of paying a lower price for milk procured and are
making money in the business of milk processing activities. (5)
Government must examine the ill-effects of increasing area under sugar
cane cultivation at the cost of other crops.
The Hindu BL deserves praise for highlighting the issue in right
perspective. If India wants to enjoy self sufficiency in sugar & milk
in the long term, then we have to pay "just" price to sugarcane & milk
producers in times of excess supply so that producers can recover
production cost plus reasonable profit which will prevent them to
switch over to other crops. India cannot achieve self sufficiency in
any agricultural product without paying remunerative prices to farmers
over long period.
It is pity that private sector dairies are refusing to purchase milk
from those producers who were regular suppliers to them due to excess
supply of milk. It is short shortsightedness and myopic view.
It is well documented that no young person is interested in farming.
It is the last preferred option for young people due to poor economic
returns.
Agriculture has been totally neglected and there no reforms in the
last two decades. Too much importance has been given to service sector
& industry.
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