June 29, 2014

AIKS Condemns Dole to Sugar Barons

THROUGH a statement issued from New Delhi on June 23, the All India Kisan Sabha (AIKS) condemned the latest decision of the Narendra Modi led government to appease the sugar lobby by doling out further benefits to them without any concrete action to ensure that the lobby clears the arrears due to the cane farmers which, by the government’s own admission, is as high as 110 billion rupees or 1.84 billion US dollars. The AIKS said this is in continuation of the policies of the Congress led UPA government which had in December approved Rs 6,600 crore interest free loans for the sugar industry exclusively for clearing the sugarcane arrears. The AIKS said the present government has extended its dole-out to allow the corporate controlled sugar mills to avail additional interest free loans up to Rs 4,400 crore from banks, which will then add up to Rs 11,000 crore altogether. However, in reality, the sugar mills have not to date cleared the dues they owe to the cane farmers. For instance, in Uttar Pradesh alone, the arrears due to farmers are more than Rs 4,400 crore. While the move was apparently intended to increase the cash flow to the corporate mills so that they could make payments of the cane arrears, the flow never reached the cane farmers. The present government has also announced that it will raise the import duty on sugar from 15 percent to 40 percent, and will consider other incentives for the mill owners. While the AIKS said it stands for increased import duties on sugarcane, the government has taken no steps to ensure that the benefit of such an increase accrue to the cane farmers. Although there is a surplus of 20-25 lakh tonnes in the domestic market, the sugar lobby will use the opportunity to further increase the sugar prices for the consumers. In pursuance of the Rangarajan committee recommendation that the sugar import-export policy should not be linked to domestic availability, this decision is silent about having quantitative restrictions on the sugar imports. The committee had argued for promoting exports on the ground that even though India contributes 17 percent to the global sugar output, its share in exports is only four percent. It also keeps the doors open for imports from outside as well as the possibility of dumping of sugar by calling for an outright ban on quantitative restrictions. India had increased the subsidy for raw sugar earlier this month to the tune of Rs 3,300 per tonne, on the pretext of boosting the output and exports. This has been extended on sugar exports until September. This has, however, not benefited in terms of a remunerative pricing for farmers. The long standing demand of cane farmers for getting a remunerative price of Rs 3,500 per tonne has not yet been accepted. Notably, the minimum support price (MSP) announced for 2014-15 is only Rs 2,200 per tonne. While farmers bear the brunt of falling global prices, the corporate mills earn huge profits when global prices rise --- without transferring any of the benefits to cane farmers. Companies also benefit hugely from byproducts like ethanol, pressmud etc while the farmers are not compensated for these products. The AIKS statement categorically said the latest move is only aimed at promoting the profits of corporate sugar mills without addressing the problems of the cane farmers. The AIKS has asked all its units to protest against this move by the government and will hold a consultative meeting of farmers from sugarcane growing states on July 23 so as to chalk out a plan for future struggles against these policies.