‘Borrowing to Feed my Family’: Govt. Dues to Sugarcane Farmers in UP Still Unpaid

Lucknow: Over the last 42 days, Naveen Rathi, a sugarcane farmer, has not received a single penny from the state-owned sugar mill that he had supplied to,causing him immense distress.

Rathi had supplied raw sugarcane worth Rs 3.5 lakh to the Uttam Sugar Mill in Khaikheri village of Muzaffarnagar district in batches, between December and mid-March. He has only received a total of Rs 1 lakh in installments.

"The last installment of Rs 20,000 was paid to me on January 22," Rathi told NewsClick. He said that the mill owner cited a drop in consumption of sugar due to the lockdown and weak demand at grocery shops as the reason for not paying him. Rathi added that mill owners said they were not in a position to pay the farmers at the moment.

Rathi said that most farmers who had received their last installment of money owed to them by the mills had already used it to repay loans and other dues, and now had nothing left to feed their families with during the shutdown.

Sanjeev, another sugarcane grower from Vailly village in Bhudana tehsil from the same district, received only Rs one lakh out of the five lakhs that the mill owed him. "I do not know when I will get the rest of my dues. I have been borrowing money from people to feed my family," he said, declaring that was reconsidering cultivating sugarcane in the future.

Sugar sales have fallen drastically due to the nationwide lockdown imposed by the government for preventing the spread of the deadly COVID-19. Hotels, restaurants and malls, major buyers of the product, have also been shut as a result. Farmers from the sugarcane belt are reeling under a severe cash crunch with their dues yet to be cleared by the state government.

Rakesh Tikait, national spokesperson of the Bhartiya Kisan Union (BKU), said that the government should help farmers instead of businessmen and corporates. “At a time when a lockdown has forced an entire country to shut down, business houses are looking for opportunities to maximise their profits. At present, the entire economy of the country is being run by farmers. But, as always, the government is not concerned about sugarcane growers. The government could also take a loan from a bank and release the payments which are due to farmers, but they rather help businessmen even in this grave situation when farmers are in dire need,” Tikait told NewsClick.

According to the Indian Sugar Mills Association (ISMA), arrears to the industry and farmers have reportedly mounted to Rs 18,000 crore. The ISMA report mentions that sugar sales in March and April this year had declined by 10 lakh tonne.

"Sugar is in the essential commodities category, so there has been no major impact on the sugar industry, but due to lack of demand from big buyers, sugar sales have dropped significantly," Avinash Verma, Director General, ISMA reportedly told news agency IANS.

The Centre had imposed a complete lockdown from March 25, due to which all establishments including hotels and restaurants were closed. In such a situation, the big buyers of sugar such as confectioners, bakeries and refrigerant companies went missing.

According to ISMA’s Director General, the industry had had problems selling sugar over the past one and a half months. “These problems have come because the demand for big buyers of sugar like cold drink, ice cream, cake, bakery, juice producers has declined,” he reportedly said.

However, BKU leader Dharmendra Malik disagreed that the demand for sugar is the problem. “It just an excuse so that they can take another year to pay the farmers. While there is no doubt that the demand for sugar has decreased, the mill has stored tonnes of sugar courtesy farmers during the season and once the lockdown lifted, the demand for sugar will definitely be high. But the mill owners do not want to pay farmers their dues," he added, asking that despite the government keeping sugar in the list of essential commodities and distributing it among the poor, “how can the demand for sugar be so weak?”

Malik explained that the sugar industry also produces ethanol, and that electricity is generated from sugarcane bagasse. “Alcohol is produced from sugarcane and its raw material is used for making paper then why can the government not pay the farmers from the money obtained by selling all this if the demand for sugar is less?" he asked.

According to BKU, the graph of pending dues to sugarcane farmers is gradually rising and stood at nothing less than Rs 16,000 crore in Uttar Pradesh.