Sugarcane: bumper crop, bitter harvest

In 2016, it wasn’t exactly a dream of Hanuman Patel to migrate to a city for a secure life with stable income. A poverty-stricken sugarcane farmer from Madhya Pradesh, Patel’s choiceless decision to abandon his home-soil was rather fuelled by the financial losses he endured for years.

Suvarna Desai, a villager in Maharashtra, persisted in growing sugarcane, hoping for a good yield the same year to clear all the debt she was crushed under for a long time. But a severe decline in rainfall and the drought that followed made her ineligible even for bank loans the following year.

In 2012, the sugarcane-water stories of farmers in Barwani, Madhya Pradesh, and Rajgoli, Maharashtra, were replete with sour details when International Finance Corporation (IFC) of the World Bank Group intervened along with Olam International and Solidaridad. The collaboration, called ‘Madhu Shree’, recognised water as a key risk-factor, because in 2015, it was rated as the highest global risk by the World Economic Forum, considering its contribution to three of the top five global risks.

With climate change and water security counted among the world’s greatest risks, this project focussed on demand-side measures by encouraging sustainable sugarcane cultivation through water-efficient, cost-effective, high-yielding productivity techniques without high capital investment, in contrast with the supply-side interventions.

The consequences of the alliance were not only sustainable sugarcane cultivation and alleviating farmers’ agonies but it also inspired an entrepreneurial spirit. But being the second largest producer of sugarcane in the world (after Brazil), with more than 50 million farmers engaging in sugarcane cultivation in over four million hectares of land (with over five lakh employees in sugar mills), the scope of such projects will have to expand throughout the country, with government involvement at central and state levels. While the cultivation techniques need to undergo transformation, we’re yet to address economic imbalances that have long plagued the prospects of our farmers’ prosperity and wellbeing.

Indian sugarcane policies aim at a fair price to farmers, reasonable returns to the sugar industry, whose annual output is about Rs 80,000 crore, and to supply sugar to consumers at sensible prices. An amendment made in 2009 to the Sugarcane (Control) Order, 1966, under the Essential Commodities Act (1955), replaced the Statutory Minimum Price (SMP) with the Fair and Remunerative Price (FRP). Based on factors like pressure from farmers’ groups and differences in productivity levels and production costs, State Advised Prices (SAP) per quintal are declared in some states, which have only yielded pricing distortion and cane-price arrears. Such dual sugarcane pricing policies are deemed unsustainable.

Meanwhile, with the introduction of CO-0238 (Karan 4), a high-yielding new seed variety, farmers have briefly celebrated bumper harvests the past few years, especially in 2017-18, only to eventually incur heavy losses due to the increasing chasm between demand and supply. Mill owners barely make profits, thanks to additional GST and transportation costs, among other woes.

Several impediments

While the solutions proposed by the government include sugar subsidies, exporting excess production of sugar, production of ethanol from sugarcane to use in cars and buying excess sugar and hoarding it as buffer stock, there are several impediments to these. The cost of sugarcane in India is about $42 per ton, and $ 31 in the US. This isn’t a sound solution, as the cultivation price in the US and the price in the world market for sugarcane are considerably lower.

As the crude oil price is gasp-worthy high compared to sugar in the world market, Brazil has successfully implemented ethanol production policies to effectively reduce oil import. But implementing the same in India poses a grave threat to groundwater levels, the depletion of which is already a grim ecological catastrophe to be fixed, making the Ethanol Blended Petrol Programme (EBPP) a potential faulty economic solution. Our dense population, insufficient rainfall and water scarcity aren’t to be ignored.

If the government were to buy the surplus sugar as buffer supply, how will the already-held 10 MMT from previous years be used? Further, 36 MMT, against consumption of 26 MMT, is being produced since 2018, which involves high risks like high storage costs and spoilage. It is vital that the Food Corporation of India, the Department of Food and Public Distribution and other agencies of the government recognise and foresee existing and impending issues and address them in favour of farmers while also keeping consumers in mind.

The Tuteja, Thorat, Nanda Kumar and Rangarajan committees have all contributed to sugarcane price policy in the country and it’s a crucial time to envision enduring solutions to save farmers from migrating to cities and worse, taking their lives in unbearable despair. While there are way too many unbridgeable gaps to be connected, it isn’t still too late to stop them from becoming fundamental injustices of life.

(Sourabha Rao is a Bengaluru-based freelance journalist)