Sugarcane leaves farmers crushed

A. Narayanamoorthy P. Alli | Updated on April 15, 2013

Sustainable practices, including reduced use of water and chemicals, are a way out. — M.K. Ananth

Costs of cultivation have gone way beyond the ‘fair and remunerative’ prices announced by the Government.

The brutal killing of two sugarcane farmers in police firing in Sangli district of Maharashtra recently shook the country’s farming community. Elsewhere, in Tamil Nadu, a sugarcane farmer turned his fury inwards by taking his life.

Distressed voices from Andhra Pradesh seem to be contemplating a ‘sugarcane crop holiday’. These poignant tales point out that something is wrong with this universally acclaimed lucrative crop. What is it? What is afflicting these farmers who are claiming a sudden burst of attention?

Is it the truant monsoon, the absence of assured irrigation or erratic power supply to agriculture that is playing havoc with these desperate farmers? Or is it the rocketing price of agricultural inputs?

Sugarcane is a multi-product crop, which occupies a prominent position on the agricultural map of India, with a cultivated area of over five million hectares. This lucrative crop is in the midst of turmoil now.

The major sugarcane growing regions of the country are bristling with rage after their repeated requests to increase procurement price for the crop have fallen on deaf ears.


Sugarcane farmers of Maharashtra are demanding Rs 4,500 per tonne from sugar factories with the first instalment of Rs 3,000 per tonne being the cost of cultivation.

Sugar factories are ready to buy sugarcane at Rs 2,300 per tonne only. Farmers also seem to be demanding a commensurate share in the profits of sugar factories, which are reportedly selling by-products of sugarcane at Rs 3,300 per tonne.

On the lines of Maharashtra’s farmers, farmers from Tamil Nadu, Andhra Pradesh and Haryana have been urging the State government to raise sugarcane price, as suggested by the National Commission on Farmers headed by M.S. Swaminathan, which recommended a price of 50 per cent more than the cost of cultivation (C2 cost).

Sugarcane growers are not only demanding a right price for their produce, but have also been urging the mills to pay their dues, amounting to Rs 5,495 crore as of May 2012.

Fearing that this would affect the fresh plantings in the forthcoming season, the Rangarajan Committee Report on the Regulations of Sugar Sector in India (2012) proposed that farmers should be paid a 70 per cent share in the value of sugar and its by-products.

The Committee also proposed to remove the sale of sugar under levy quota, thereby enabling the mills to pay their dues to farmers on time. Will these recommendations help the farmers reap gains?

cultivation viability

The relentless lament of sugarcane farmers is that after spending about 40 per cent of their cost of cultivation on harvesting alone, they seldom get adequate returns from the mills. Their query is why they should cultivate sugarcane if they are not given a reasonable return on the crop.

Responding to this distressed query, the Cabinet Committee on Economic Affairs (CCEA) in compliance with the recommendations of Commission for Agricultural Cost and Prices (CACP) came forward with a hike of Rs 40 in Fair and Remunerative Price (FRP) at Rs 210 per quintal for the season 2013-14.

Is this enough to realise profitability in sugarcane cultivation? Various farmers’ organisations hinted that the hike is in no way going to ameliorate their condition, as the final payments will amount to very little after deducting the cost of transportation and harvesting. These costs have been increasing at a faster rate, especially in recent years.

Farmers argue that no one cross-checks with the peasants on whether the ‘fair and remunerative’ prices announced by the State are indeed so. It is quite obvious that the prices are neither ‘fair’ nor ‘remunerative’.

Data published by the Commission for Agricultural Cost and Prices for major sugarcane growing States vividly portrays that sugarcane cultivation is unviable.

As per the CACP data, farmers of Maharashtra incurred losses in six out of 14 years from 1996-97 to 2009-10 in sugarcane cultivation; those of Uttar Pradesh, Tamil Nadu and Andhra Pradesh were struggling to get any substantial profit over cost C2 during the same period.

Supporting the farmers’ views, the Indian Institute of Sugarcane Research has also underlined in its annual report of 2011-12 that input prices have increased massively in the recent years. If sugarcane crop ceases to be remunerative, will the farmer put up with losses for someone’s welfare?

Sugarcane farmers of Andhra Pradesh and Punjab have said that with sugarcane cultivation being non-remunerative, the State is expected to lose 25-30 per cent of the sugarcane area in the forthcoming season.

Similar voices are being heard from other major sugarcane producing States. Are our policymakers aware that this would severely affect sugarcane availability for the sugar year 2013-14?

What signals do we get from the fields? It is observed that the area under sugarcane in Uttar Pradesh, Maharashtra, Tamil Nadu and Andhra Pradesh is dwindling over a ten-year period (2000-01 to 2009-10) owing to its unviability. The situation is equally grim in the production scenario as well. Won’t this dismal trend cripple the livelihood of about six million sugarcane farmers in the country?

Sweetening policy

It is clear that farmers are cultivating this sweet grass with withered hopes. Lip service and high-profile visits of policy-makers to the stricken fields have done little to ameliorate farmers’ condition. While sugarcane farmers are expecting good news from the government by way of acceptance of the Rangarajan Committee’s recommendations, what can be done to put farming back on the track?

While any effort at increasing productivity through innovative methods will reduce the per unit cost of sugarcane cultivation, there is an urgent need to popularise Sustainable Sugarcane Initiatives (SSI), which can help the farmers to produce at least 20 per cent more sugarcane, and that too with 30 per cent of reduced water consumption and 20 per cent less chemical inputs.

It should also be made mandatory on the part of the sugarcane factories to abide by the Bhargava formulae on arrears and make the payments to the farmers within 15 days after purchase, with interest in case of any delay. As underlined in the Sugarcane Control Order 1966, fixing the realistic recovery percentage, providing soft loans to farmers from the Sugarcane Development Fund and introduction of modern and innovative implements from sowing to harvesting will improve the condition of sugarcane farmers.

Implementing the recommendations of the Rangarajan Committee and fixing cane price in accordance with the National Commission on Farmers will improve the situation.

(Narayanamoorthy is Head, Department of Economics, Alagappa University, Karaikudi. Alli is Assistant Professor, Economics, Vellore Institute of Technology.)

Published on April 15, 2013

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