As cane crushing by cash-strapped sugar mills in Uttar Pradesh is expected to be delayed this year, jaggery makers are making a killing. While the state is yet to fix the cane price for the current marketing year that started on October 1, farmers harvesting early are being forced to sell their produce at R140-170 per quintal, much lower than even last year’s price of R280 a quintal.
This is because in the absence of competition from the main consumer ? the sugar industry ? farmers are faced with little choice, as they have to empty their field early for wheat to be sown this winter.
Deepak Guptara, secretary of UP Sugar Mills Association, says the kolhus not only exploit the farmers but also cause a national loss. ?Only 47% of cane goes to the mills, while the rest is diverted to other uses, such as gur manufacturing, chewing, planting, cattle feed, etc. The gur industry itself consumes a large chunk of about 35% of the total cane, which it is purchasing at R140-170/quintal. And the most shocking part is that while the recovery percentage of sugar by millers is almost 11%, the kolhus, which operate through the open pan procedure, are able to achieve recovery of about 6-7%.
?This is a national loss,? he opines, adding that sugar millers continuously invest in research and development of sugarcane in their catchment area either from their own resources or from the government-funded programme. ?A lot of effort is put into identification and introduction of new varieties, inter-cropping to increase farmer?s income and to sustain sugarcane area, etc, but despite all these efforts, a major chunk of early maturing variety of sugarcane in UP is diverted towards these local gur and khandsari units, which are free to purchase sugarcane at much lower prices as compared to sugar mills. This is impacting national growth as well as sugar millers,? he says, adding that this in a way leads to huge cane arrears in UP, which is home to about 25,000 jaggery/gur units and about 50 khandsari units.
?It has been a pattern for a long time that gur units in UP roughly consume 50% of the cane, especially of the early crop, when mills do not start crushing operations. In the case of western UP, for instance, farmers start getting restless by the end of September itself as they need to get their fields ready for wheat sowing. If they delay harvesting the cane and wait until the factories start operations, they would be at a loss and the wheat crop will get affected. So they are pushed to the kolhus or other alternative sources of crushing, to whom they can sell their standing crop. Apart from this, many small farmers, too, are pushed into selling their cane to these crushers as they need money. Since the farmers are in a hurry and they have no alternative place to sell their crop, the crushers try to extract the maximum benefit out of the distress sale and start exploiting the farmers by paying them a price that is way below the market price or even the FRP or SAP,? says Pritam Singh, a progressive farmer from Deoband, Saharanpur.
He added that ?high-quality cane is going to kolhus and the benefits of research and development are not going to the industry. ?Farmers need protection and when the mills delay crushing operations, they are forced to divert their cane to meet expenses or vacate the fields for wheat. They get a paltry R170-180/quintal in the distress sale. But the day the mills start crushing, prices shoot up to R230-240 immediately,? he said.
A miller requesting anonymity said: ?In an effort to stop the fall of sugar production in the country and limit the national loss, it is important that gur and khandsari units are reigned in and the government should take a lead in resolving the basic issues of the industry.?