Government has announced a package of 5,5000 crore to support sugarcane farmers. The money will be used for transfer of the price of sugarcane directly to farmer’s bank account. Sugar production has been grown exponentially in the last few years and mills are not able to pay sugarcane price to farmers. Therefore government intervention has become necessary to support farmers. Centre will pay 13.88 for every quintal of sugar crushed by mills directly to farmers’ bank accounts. This will involve a cost of 4,163 crore. The centre will also spend 1,375 crore to facilitate exports of sugar by bearing a portion of the transport and freight costs.
In 2017-18 sugar production rose to 32 million tonnes which is a whopping 60 percent year on year growth. In this production year, output is expected to grow to 35 million tonnes while domestic consumption remains at 26 million tonnes. The reason behind good production over the past few years is a new sugarcane variety named Co-0238, developed by the current director of Sugarcane Breeding Institute (SBI), Bakshi Ram. This new variety brought a production revolution in western Uttar Pradesh as it suited the environment of the area. The pattern in sugarcane production cycle was a sharp decline after two or three years of good production. This pattern changed after the introduction of this new variety which was introduced in 2014 to sugar farmers. Now, the good crop cycle is extended for five years and per hectare production has gone up sharply.
The production sugar has gone up shapely but the consumption remains low at domestic end. This resulted in pile up of sugar in the country and prices have crashed. Therefore government is seeking other means to support farmers like exports and use sugar for ethanol production. “India has saved forex worth 4,000 crore in the last financial year due to savings from ethanol blending programme. The government aims to increase these savings to 12,000 crore per annum over the next four years,” said Modi. “We also aim for an earning of 20,000 crore solely through conversion of sugarcane to ethanol. This amount will aid the income of farmers. The Centre also wants more agrarian produce such as potatoes and agrarian waste to be converted into ethanol and we are working towards the same,” he added. Government has also set a floor of 29 rupees per kg for sugar to save farmers from declining prices due to growth in production.
Sugarcane farmers, being more organized and financially more powerful than ordinary farmers, were pressuring the government to take measures to support them. The problems of sugarcane farmers were once again highlighted when they protested before the Kairana bypolls. BJP lost the Kairana bypolls in which farmer’s discontent played a role, because a majority of the people in the district are farmers and sugarcane is a major crop in the area. The BJP does not want sugarcane farmer issue to cost it in the upcoming general election. Therefore solution to sugarcane farmer discontent has become important for the party. Sugarcane being a major cash crop in the country impacts rural economy to a great extent and a permanent solution to excessive production through government intervention is necessary.
