Around 9.30 pm on January 16, more than 100 sugarcane farmers entered the campus of Upper Doab Sugar Mills Limited in Shamli district and forced its operations to a halt. Mill staff reached out to the local district administration and police. But till January 25, farmers were staying put, forcing the mill to approach the authorities with a request to allow it to call an end to crushing.
Jitendra Nirwal warns that the agitation will continue till farmers are paid their dues. The 42-year-old says the mill owes him Rs 1.25 lakh for the sugarcane he supplied last season, with the last payment made in March 2018. In all, Uttar Pradesh’s 119 mills owe growers Rs 5,400 crore for the current season, with Rs 1,343 crore pending from the season before. There are 35 lakh sugarcane farmers in the state.
Year on year, the issue of sugarcane dues is a recurring story in this area of Uttar Pradesh with 14 districts, accounting for around 43 per cent of the state’s sugarcane production and some of the tallest farm leaders, including former prime minister Chaudhary Charan Singh and the Bharatiya Kisan Union’s Mahendra Singh Tikait.
On way to Shamli from the Capital, stretches of sugarcane fields are visible on both sides of the highways. With crushing season at its peak, smoke rising from chimneys gives away location of mills from far, and there is a line of bullock carts and trolleys making their way to the units down most roads. For 40 km around, Shamli is the main marketing centre, its prosperity built on this cane money. Thirty per cent of its farmers are big landlords, who have now branched into other businesses.
Nirwal is not among them. In the current crushing season, that started in November 2018 and will last till March 2019, Nirwal has supplied around 400 quintals of sugarcane to the Upper Doab mill, with 200 quintals more to go, and not got any payment. His 20-bigha land on the outskirts of Shamli town, located 4 km from the mill, is mortgaged to the banks.
Nirwal, who quit school after failing Class 10, says sugarcane farming is the only source of income for his family of four. Last year, to deposit Rs 1 lakh for his son’s B.Tech course at an engineering college in Jaipur, he had to borrow from his elder brother Yogendra Nirwal, who runs a property business.
Nirwal has another Rs 2 lakh loan, taken on his Kisan Credit Card (KCC) from a bank last year to start farming for the current season. For his yield of around 50 quintals per bigha, the 42-year-old points out, he spends around Rs 10,000. “Last year, the Electricity Department cut electricity thrice because I could not pay the bill of Rs 1,800 per month on time.”
Shubham Mallik (25), who has 45 bighas of land, sells the sugarcane he grows to three mills — Upper Doab Sugar Mills Limited, and two mills in the Thana Bhawan area of Meerut district. Mallik says all owe him dues from last year, and this.
Disheartened by the dwindling profits, Mallik is now preparing for a government job. A role model is grandfather Kartar Singh, whose pension after retiring as a government teacher is a major help for the family. Kartar incidentally also has an outstanding loan of Rs 4 lakh taken through KCC while Shubham’s father Yashpal Singh has a Rs 1.5 lakh pending loan. “Earlier, my family had a loan of Rs 1.76 lakh which was waived off by the BJP government in 2017. But we had to take a fresh loan for the next crop,” Mallik says.
Another farmer, Sudhir Kumar, says they don’t expect things to improve, and that arrears will grow in the current season because of higher production of cane (around 5.7 crore quintals for Shamli district this year). “Despite non-payment from mills, farmers have to supply the cane as they have to clear the farm for the next crop,” he points out.
Bijender Mallik, waiting outside the Upper Doab mill with around 60 quintals of cane, warns that the rising anger among farmers may cost the BJP. This area is dominated by Jats, Gujjars and Muslims, with a significant population of Dalits — a combination that, on paper, leans towards the Samajwadi Party-BSP alliance, which may include the Rashtriya Lok Dal. Says Bijender, “In 2014, the BJP had won because of polarisation of voters on religious lines. This time, cane arrears will be a decisive factor.”
Spread over 70-odd acres in the heart of Shamli town, next to the railway station, Upper Doab Sugar Mills Limited was established in 1933 by Sir Shadi Lal, who once served as chief justice of the Lahore High Court. Sir Shadi Lal Enterprises Ltd owns this sugar mill as well as Shamli Distillery and Chemicals Works, located on its premises, that produces IMFL and ethanol.
The mill, which has a staff strength that varies between 900 and 1,100 depending on the crushing reason, when it runs operations 24X7, can crush 70,000 quintals of sugarcane per day and procures sugarcane from around 30,000 farmers. Its registered office is in Central Delhi and currently, Shadi Lal’s grandson Rajat Lal looks after the business as managing director.
Chief Operating Officer R B Khokhar, who says they have been in losses for five years, admits that in 2017-18, the mill had purchased sugarcane worth Rs 372 crore and payment of around Rs 80 crore is still due, while in the current season, of the Rs 126 crore due for 39 lakh quintals, no payment has been made.
The state advisory price for procurement of sugarcane from farmers is Rs 325 per quintal and Rs 312 per quintal for two different varieties of the crop. The mill produces 10-11 kg sugar from each quintal of cane, at a recovery rate of 10.9 per cent.
Khokhar says there are losses because the production cost of sugar is Rs 35 per kg, the current selling price is Rs 30 per kg while the government has fixed Rs 29 per kg as the minimum selling price. “We are losing Rs 4-5 on each kilo of sugar.” The India Sugar Mills Association has asked the government to increase the MSP to at least Rs 34 per kg.
Besides, Upper Doab mill also has pending sugar stocks. It produced two lakh quintals of sugar in December and is expected to produce 2.25 lakh quintals in January, but as per a government-fixed quota to check surplus, it could sell only 70,000 quintals and 41,000 quintals respectively. After the current season procurement, it has a stock of more than 4 lakh quintals in its godown.
Noting that their red balance sheets mean banks are also reluctant to lend, Khokhar adds that last year the UP government had announced soft loans for mills at low interest rates so that they could pay farmers. “We applied for a soft loan of Rs 80 crore. Once we get the loan, we will first pay the dues of the previous crushing season.”
However, Suresh Rana, Minister of Sugar Industry and Cane Development in Uttar Pradesh, says Upper Doab doesn’t qualify for the soft loan scheme, under which such loans had been granted to 50 other mills. He adds, “In Shamli, an FIR has been lodged against the sugar mill owner, and directions issued that its stock be sold to pay farmers.”
Claiming that UP mills have less outstanding dues than other states, and that no payment is due from 90 of the 119 sugar mills in the state for the previous season, Rana says, “The Yogi Adityanath government has done remarkable work in the interest of sugarcane farmers.”