India witnessed economic contraction of 23.9 per cent in the recently released GDP data for Q1 (April-June) due to Covid-induced lockdowns. This economic contraction has serious ramifications, especially for the livelihoods of the poor and vulnerable.

As urban economic centres are yet to pick up post the lockdown, policymakers are urgently seeking ways to employ the in-migrants gainfully. Uttar Pradesh, the most populous State, accounts for the highest number of out-migrants. According to Census 2011, 8.3 million people from UP either moved temporarily or permanently to other States in search of livelihood. This number excludes those who migrated from the hinterlands of UP to areas forming part of the NCR.

Given its high magnitude of out-migration, UP also experienced the return of a large number of migrants when the Covid crisis unfolded. About 3.8 million migrants returned to the State. The Central government has enhanced allocation to the MGNREG scheme and has launched Garib Kalyan Rozgar Abhiyaan for the employment of these returnee migrants.

However, ensuring food and livelihood security, decent shelter, and healthcare for for these in-migrants pose enormous challenges for the State. A multi-pronged and multi-sectoral approach is the need of the hour.

In an agrarian economy like UP, the farm sector can play a crucial role in tackling this challenging situation. Despite the largest GDP contraction during Q1 of FY21, the healthy 3.4 per cent growth in GVA of agriculture, forestry and fishing appears to be a silver lining. What role can agriculture, particularly the sugarcane sector, play in providing livelihoods for in-migrants in UP?

Sugarcane sector

Uttar Pradesh contributes close to 44 per cent of the total area under cultivation and production in India. Although its productivity is higher than the national average, it lags a few major States such as Maharashtra and Tamil Nadu.

Sugarcane accounts for close to 10 per cent of the total cultivable area in UP and is the mainstay of about 3.5 million farm households. Since 2014-15, the cane sector, despite several challenges, has been showing improved performance in terms of the area under cultivation, productivity, production, crushing, and by-product recovery.

During this period, the CAGR for production and productivity was 9.4 per cent and 4.5 per cent, respectively. Similarly, at the mill level, CAGR for sugarcane crushing and production was 8.5 per cent and 12.2 per cent, respectively. Despite this growth, ensuring Fair and Remunerative Price-based payments to cane growers and management of arrears of payments to mills have been a challenge.

The State Cooperative Societies Act, 1965, envisages a three-tier structure consisting of farmers, cooperative cane development societies, and sugar mill societies. Besides the cooperative structure, 119 operational private mills account for a lion’s share of milling operations in U.P.

In-migrant livelihoods

Sugarcane is a labour-intensive crop. Inadequate mechanisation of the cane sector in UP means that there is a huge potential for absorbing skilled and unskilled in-migrants.

According to estimates, the skilled and unskilled respectively constitute 54 per cent and 46 per cent of the 3.8 million in-migrants. Among skilled in-migrants, the share of construction and factory workers is 53 per cent and 6 per cent, respectively. Women constitute 8 per cent of in-migrants. The policymakers can focus on matching the skills of in-migrants with requirements of various stages of the sugarcane value chain.

Unskilled migrants, who usually lack productive resources to undertake farming on their own, can be engaged in tenancy farming. In-migrants can be employed in providing wage-based valuable services for inter-cultural and harvesting operations.

Skilled in-migrants can be employed in various operations of sugar mills. They can be a valuable human resource for operations such as sugarcane crushing and recovery. They can also be engaged in multiple by-products development and sales. In-migrants with experience in the chemical sector can be used for by-product development such as ethanol from molasses.

Those who worked in the paper industry can be leveraged for paper production from bagasse. The adoption of such an approach provides a win-win solution for various stakeholders besides alleviating the crisis faced by in-migrants.

Dey teaches at IIM Lucknow. Kumar is a doctoral scholar, at IIM Lucknow. Views are personal

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