A tug of war for sugar farmers
By Anaka Harish Ganesh
Recently it was reported that Australia is taking legal action against India at the WTO for “far exceeding” the level of farmer assistance permitted under WTO rules in the sugar industry. They allege that this has caused a “significant downturn” in global prices and have hurt Australian producers. These subsidies and this issue are just the tip of the iceberg. Looking deeper, a domestic political battle for a significant constituency will reveal itself. Sugarcane farmers are an important constituency in UP, Maharashtra and Karnataka, but for now I will only analyse their effect on the upcoming elections in Maharashtra.
Of the 542 sugar mills in India, 187 are in Maharashtra and of the total sugar production in the state, around 77% is confined to the regions of Marathwada and Paschim Maharashtra (the blue and green regions in the below image). The sugarcane farmers in these 2 regions are an important constituency as they an impact on 10-15 Lok Sabha seats in Maharashtra, out of the total 48.
Many Congress leaders took on significant roles in these cooperatives which gave them access to a big chunk of voters. But after Sharad Pawar broke away from the Congress to form the Nationalist Congress Party (NCP), he took most of the cooperatives with him. Currently, two-thirds of the cooperatives are controlled by the NCP, a fifth by the Congress, and the remaining by BJP and Shiv Sena.
Each cooperative factory has a network of sugarcane farmers and till the mid-1990’s no other cooperative was allowed to buy sugarcane from farmers belonging to other cooperatives. One side of the story claims that the farmers were compelled to vote for the leaders who were controlling their cooperatives for the fear of their sugarcane not being bought, if these leaders were not elected. The wiser side of the story claims that the leaders’ contribution to the region’s development helped them win elections. Nevertheless, over time the cooperatives influence on its network of farmers is waning perhaps because of alternative opportunities available to them.
The rise of BJP and Shiv Sena in Paschim Maharashtra and Marathwada in 2014
The first possible dent in the unanimous control NCP and Congress had on the sugarcane farmers in Paschim Maharashtra was the emergence of Raju Shetti of the Swabhimani Shetkari Sanghatana (SSS). He is known to have a remarkable connection with the sugarcane farmers owing to his clear and fervent representation of their concerns. In 2009 he managed to win a Lok Sabha seat from Hatkanangale.
During the 2014 elections, understanding the need for a voice that connects with the sugarcane farmers, the BJP and Shiv Sena formed an alliance with SSS. Following which, the NDA managed to up its tally from 2 to 6, out of a possible 10 seats in the region. Of course, a lot of other factors like the Modi wave, and an overall perception of ‘corruption’ in the UPA government helped the alliance. Apart from the NDA’s victory in the region, it is also important to note that even though the Congress lost all its seats here, the NCP won 4, in a region that is known to be its stronghold.
In 2017 however, Raju Shetti severed ties with the NDA, and the SSS joined the UPA over dissatisfaction with the Narendra Modi government on its handling of farmer issues. Probably anticipating the exit of Shetti, in 2016 the BJP lead government in the state had already placed Sadabhau Khot of the Swabhimani Paksha (SWP), another party representing the sugarcane farmers, in a strategic position. They made him the Minister of State for Agriculture and Horticulture and Marketing.
The second region, Marathwada, is traditionally a Congress stronghold. In the general election of 2014 there was no real change in the seat share between the parties. The only change being that the NCP lost its solitary seat and the BJP gained an additional. But in the state assembly elections of 2014 there was a significant shift towards the BJP and Shiv Sena and a significant shift away from the Congress and NCP. The farmers in the region had suffered a lot due to drought while the UPA government was in power. So, an irrigation scam worth Rs 70,000 crore to 1 lakh crore severely affected the Congress and NCP.
BJP’s attempts to dismantle the connection between farmers and the NCP and Congress
After coming to power in 2014, the Fadnavis government has taken noteworthy changes in Cooperatives and APMC’S. Firstly, the Maharashtra Cooperatives Societies Act was amended to facilitate the appointment of independent experts to the boards of all cooperatives, including sugar cooperatives. Chief Minister Devendra Fadnavis also barred directors on boards of cooperative banks from contesting elections for two terms if their bank has seen financial irregularities and administrative mismanagement. Next was a set of changes to the APMC Act to subvert the monopoly that traders have over farmers in the state. Although these changes are officially aimed at reducing corruption and improving the lives of farmers, the political undertones aimed at weakening the Congress and NCP’s control over the farmers cannot be disregarded.
While the BJP can benefit from these changes in the long term, the NCP and Congress have established their power in the cooperatives over decades. Hence, their control cannot be toppled overnight and the BJP might not immediately benefit from the above-mentioned changes.
The worrying scenario of the sugar industry
Currently, the mismatch between demand and supply of sugarcane is a cause for concern for the BJP government. In Maharashtra the area under sugarcane cultivation has increased by 25 per cent this season. Last season, glut in sugarcane production domestically and internationally caused the prices to slide, this led to mounting arrears to sugarcane farmers. But the BJP announced a Rs. 7000 crore package for the sugar sector, which is said to have helped the farmers.
In June this year, only 71 out of 187 mills had cleared all their arears from last season, which lead to the government sending notices to 96 mills. By September however dues had fallen from Rs. 1768 crores to Rs. 437 crores.
Despite last year’s set back, farmers continue to grow sugarcane because of its assured returns to growers. It is the only crop where mills are compelled to purchase the crops at state mandated fair and remunerative price.
The expected production in India of sugar this season is between 30 to 35 million tonnes while domestic consumption is only 25 million tonnes. Exports are not a viable option as international prices are lower than domestic prices. Hence, this year’s arrears can be higher than that of last years. How will the government tackle this? With elections inching closer they will probably just resort to a large package like last year or issue loan waivers or both.
In Conclusion
The Congress and especially the NCP’s loosening control over sugar cooperatives and APMC’s can be worrying for them. But the changes having been implemented only recently may not severely affect their hold. The most significant critic of the Congress and NCP on behalf of the sugarcane farmers, Raju Shetti having jumped over to their side is a definite plus.
What we need to watch out for is the BJP’s marketing. If they manage to highlight the changes they made in the sugar cooperatives, APMCs and banks as an effort to improve farmers’ lives and reduce corruption, they can give the Congress and NCP a run for their money.
Overall, almost 5 months before the elections the BJP and the Congress-NCP alliance can put up a formidable fight for the much-coveted constituency in Maharashtra.
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