Politics

In Western UP, Sugarcane Farmers Will Determine Electoral Outcome

Discontent among sugarcane farmers, who are caught in a battle with mill owners and upset with government inaction, will impact caste dynamics in the region, which in turn will determine the voting pattern.

Credit: Shome Basu

Sugarcane farmers will determine the electoral outcome in western UP. Credit: Shome Basu

Western UP: At the heart of politics in western Uttar Pradesh is the sugarcane crop and the livelihoods associated with it. Jats, Muslims, Gujjars, Sainis, Kashyaps, Prajapatis and many other such caste groups – integral parts of the complex electoral arithmetic – are sugarcane farmers. As western UP votes in the first two phases of the assembly polls on February 11 and February 15, the results will be influenced by how these farmers – or caste groups, as political parties view them – vote.

But what is surprising is that issues of sugarcane farmers, who have been protesting through the year about delayed or inadequate payments and who are stuck in a long-drawn standoff with the sugar mills in the area, have remained in the background. This, despite about half of the 140 seats up for grabs in the first two phases of the polls being from sugarcane-driven economies.

The answer lies in the underlying divisions among farmers based on caste solidarities, which political parties have used to their own advantage. While former prime minister Chaudhary Charan Singh had managed to bring farmers issues to the forefront by uniting the dominant Jats and Muslims of the region, the long-standing harmony between the two groups suffered a big jolt after the 2013 Muzaffarnagar-Shamli riots.

The fragmented electorate in western UP has, as a result, been reduced to a delicate caste arithmetic, with each party trying to get as many groups as possible together under its fold.

For the first time in recent electoral history, the biggest farmers’ union in western UP, the Bharatiya Kisan Union (BKU), once exemplarily led by Mahendra Singh Tikait, has remained non-committal in its support to a political party. While it had supported the BJP in 2014 general elections – the saffron party won all 17 Lok Sabha seats in the region – the BKU has not sided with any party in the assembly polls to mark its protest against the parties’ failure to raise farmers’ issues.

While this token protest may not cause much damage, given the way western UP politics has played out over the last few years, discontent among farmers, irrespective of their caste, will definitely impact the voting pattern in the region.

Credit: Shome Basu

Sugarcane farmers are caught in a battle with mill owners. Credit: Shome Basu

Why are farmers angry?

Many problems have plagued sugarcane farmers in the region over the last few years, of which sugar mills delaying payments to farmers has been the most intense. Most farmers The Wire spoke to complained of long delays.

“The sugarcane harvest season starts from November to early March. Each farmer gets his crop to the sugar mill. In the last three months, we have received payments only for 10 days,” said Vinod Nirwal, a Shamli farmer and BKU leader.

Several others in many constituencies across western UP spoke of long payment delays despite most sugar mills in the area functioning continuously over the last three months.

“The sugar mills are supposed to pay us through government-appointed sugarcane crop management committees – which act as the channel between the mill and the farmer. However, these committees have been generally partial towards the problems of mill owners, who more often than not wait for the sugar prices to go up before they sell,” said Jitender Hudda, a BKU leader and also a medium farmer.

The delay in payments and alleged hoarding of sugar by mill owners have precipitated a debt crisis in the region and moved the farmers away from the formal economy. Many have started selling their produce at much lower prices to small-scale jaggery manufacturing units which pay them in cash. In the last few years, a large number of these units have mushroomed all over western UP and are generally run by landless agricultural workers, who borrow money from the market to pay the farmers in cash and to keep their businesses going.

But demonetisation has hit this alternative route too. “Notebandi has had a disastrous impact on the region. Farmers who are already reeling under many pressures have been forced to look out for non-agricultural work,” said Hudda.

Disastrous policy

Over the past decade, the sugarcane farmers, who were relatively well-off a few years ago, have had to bear the brunt of incoherent policy measures by successive government.

The standoff between the farmers and mills began when the Union government linked the price of sugarcane to sugar rates. For years, the Centre controlled the price of sugarcane through the Commission for Agricultural Costs and Prices (CACP) on the basis of farmer’s input cost. The minimum support price ruled by the CACP was complimented with an additional bonus known as the state-advised price decided by the state governments.

The sugar mills were obligated to pay the farmers the final price, which gave the farmers a profit of anywhere between 50-70% over their input costs. Although it was a time-consuming process, it was a secure one.

This Fair and Remunerative Price (FRP) system worked well for both the farmer and the sugar mill. The government, while controlling the sugarcane prices, also devised a release mechanism for sugar. This maintained a balance between the intake of sugarcane and sale of sugar, which, in turn, ensured that sugar prices never went below par. At the same time, the governments also limited export and import of sugar to strengthen the domestic market. It also purchased levy sugar from the mills in lieu of taxes to keep the public distribution system moving smoothly. The sugar mills were thus protected from market vagaries.

However, all of this stability crashed when the UPA-II government decontrolled the sugar sector on the recommendation of the 2012 Rangarajan Committee report. The purpose was to boost growth of the Rs 80,000-crore sugar sector. The new system scrapped the FRP system, freed the mills of the obligation to provide levy sugar and also ended the release mechanism. The only thing left of the old system was that the mills were still required to buy their sugarcane from regional farmers.

While this led to tremendous growth in the sugar sector, with mills demanding more sugarcane from farmers and farmers cultivating more, it also led to a severe drop in sugar prices because of the increased availability of sugar. Sugar mills started to hoard for better prices, while cash-dependent farmers could not figure a way out of market vulnerabilities.

Credit: Shome Basu

Credit: Shome Basu

Current situation

The policy fiasco has precipitated a battle-like situation between the sugar mills and farmers. While farmers are incurring a loss of anywhere between Rs 15,000 to Rs 30,000 per acre of land because of heightened input costs and decontrolled prices, the delayed payments have caused further harm to their conditions.

As a result, they have been demanding that the government regulate the mills in someway for smooth payments and divert the taxes that are collected from the mills to the farmers. They are also demanding that the production of sugarcane byproducts, such as ethanol and molasses, be pushed further and their prices be regulated by the government.

At the same time, the mills, most of which are debt-ridden because of a fall in sugar price, are demanding that they should be given tax relief or loan waivers.

“Poor recovery of sugar from the crop and a crash in sugar prices all over has led to a situation of near-bankruptcy for us. And that is what has delayed payments for farmers,” a high-level official of Upper Doab Sugar Mills in Shamli, R.S. Sahrawat, told The Wire while completely dismissing the allegation of hoarding against it.

Political impact

In the months leading up to the 2014 parliamentary polls, the BJP’s prime ministerial candidate Narendra Modi struck a chord with western UP farmers by saying that his first priority would be to to sort out the payments issues and re-energise the sugar sector.

Three years down the line, however, both the farmers and the mills are completely dissatisfied with the steps he has taken.

In 2015, Modi announced a soft loan of Rs 6000 crore to the sugar mills so that they could clear their debts and pay the farmers on time. However, most of the mills in western UP could not meet the tight terms and conditions of the loan. As a result, they could not borrow the required amount.

The Indian Sugar Mills Association (ISMA) termed the government measure as “unproductive” as the temporary relief did not address the problem of depressed sugar prices and surplus produce.

Credit: Shome Basu

Discontent among sugarcane farmers will impact caste dynamics in western UP. Credit: Shome Basu

Farmers, on the other hand, are extremely angry at the central government’s false claims. “On at least three occasions, Modi claimed that he has solved the issue of payments. On independence day last year, he had the gumption to announce from the Red Fort that 95% sugarcane farmers have already got their dues. On the same day, farmers had blocked many mills in western UP for non-payments,” Hudda told The Wire.

The government’s lack of interest in finding permanent solutions and the soft loan to mills have led to a growing perception among farmers that the Modi government is catering to the rich mill owners.

“These mills owners fund political campaigns of the BJP. Why would it go against them. The sugarcane control act clearly mentions that a farmer has to be paid within 14 days once he sells his crop to the mills. Both the central and state government have completely ignored this legal liability of mills,” said Master Jahid, a farmer in Thana Bhawan, a small town in Shamli district.

The material issues of farmers have led to a small churning in the current caste equations that every party is banking upon.

A large section of dominant Jats, who had voted en masse for the BJP in 2014, has moved away from the BJP towards the Rashtriya Lok Dal (RLD) led by Ajit Singh, the son of former Prime Minister Charan Singh. A resurgent RLD, which was wiped out in 2014 polls, has made a serious comeback.

Similarly, a large section of upper caste traders, who have been impacted by the twin blows of demonetisation and a collapsing sugarcane economy, are also contemplating alternatives.

The fragmentation of the electorate has led to a new arithmetic, which each party is hoping to take advantage of. Political analysts say that BJP’s western UP leaders (such as Muzaffarnagar riot accused Sangeet Som and Suresh Rana) invoking communal issues in the last phase of political campaigns indicates that the churning within the farmers communities have upset the saffron party’s so-called development plank that it was banking upon until recently.

In a polarising attack on Muslims, Rana had said that if he was elected, Muslim-dominated places like Kairana, Moradabad and Deoband would be put under curfew. Clearly, the flight of its support base has been a cause of worry for the BJP.

In the name of saving Hindu men and women from “Muslim atrocity,” the BJP is trying hard to get back the support of farmers. While a substantial section of small and marginal farmers belonging to the most backward classes, such as the Sainis, Khushwahas and Prajaptis, may still put their faith in the saffron party, it is the flight of big and medium farmers like the Jats and Gujjars that is bothering the BJP.

In this fragmented electorate, the Bahujan Samaj Party may emerge as the only player that has support bases in every community, the largest being its traditional Dalit voters. The SP-Congress combine, meanwhile, has not really taken off on the ground thanks to a much-delayed start of its campaign, internecine feud and rebel candidates.

That said, the polls in western UP remain truly four-cornered as a collapsing sugarcane economy has pushed caste equations into a state of flux. At present, it hangs in a delicate balance, which could shift in one party’s favour with only a slight nudge.