Union Minister is lying by claiming that sugar export subsidy is for the benefit of peasants

Announcing the decision of the government on 16th December, Union Minister Prakash Javadekar said that the Cabinet Committee on Economic Affairs (CCEA) has approved Rs. 3,500 crore subsidy for sugar farmers for the 2020-21 season, which will result in the export of 60 lakh tonnes of sugar. He then added that 5 crore sugarcane farmers will benefit from the Cabinet’s decision on sugar and that farmers will get subsidy directly in their account. While the Minister is talking as if it is a subsidy to sugar cane growers, the fact is that capitalist owners of sugar mills are the ones who export sugar. It is they who will receive the export subsidy.

Sugar cane growers are regularly cheated, every time the sugar cycle enters a phase of overproduction. The sugar mill owners cut their losses by not paying for the cane that has been supplied. The accumulated arrears due to the peasants from the sugar mills was Rs. 12000 crore at the end of the 2018-19 season. It rose to Rs. 13000 crores at the end of the 2019-20 season. The organization of capitalist owners of sugar mills, the Indian Sugar Mills Association (ISMA), has admitted that sugar mills in Uttar Pradesh owe cane growers as much as Rs 5,553 crore, followed by the mills in Karnataka (Rs. 2,714 crore) and Maharashtra (Rs. 2,636 crore).

Each year, the sugar cane growers in UP, Bihar, Karnataka, Tamil Nadu and Maharashtra have had to agitate for being paid for the sugarcane they have delivered.

The fact is that the central and state governments have done nothing to ensure prompt payment on delivery to the sugarcane growers.  This is a gross failure on the part of the state to enforce commercial contracts.

Everybody in the market place is supposed to pay for what they buy.  Why are capitalists in the sugar industry exempt from this general law?  It shows that there is no rule of law when it comes to the peasants who produce sugar cane.  All the improvements in the “ease of doing business” are only for capitalist companies.  There is no ease of business for the peasants, who are not even assured of payment for what they deliver.

In response to the agitation of the peasants for their claims, the government said in Parliament in September 2020, “Payment of cane price to sugarcane farmers by the sugar mills is a continuous process. However, on account of surplus sugar production during the previous sugar seasons, the sugar prices remained depressed, which adversely affected the liquidity of the sugar mills, resulting in accumulation of cane price arrears of the farmers.” This is clearly an argument in favour of the capitalists, at the expense of the security of livelihood of peasants.

The central government claims that it has taken “various measures in past three sugar seasons, namely, we have extended assistance to sugar mills to facilitate the export of sugar; extended assistance to mills for maintaining buffer stocks; extended soft loans to sugar mills through banks to clear cane price dues; and fixed minimum selling price of sugar”!

All these measures are to benefit the sugar mill owners. It is being argued that once the sugar mills get money in their bank accounts, the peasants will get paid. This is the dubious basis for the Minister’s false promise of subsidy flowing to the peasants. It is a dubious basis because there is no guarantee that the capitalists will use subsidy payments to clear their arrears to the peasants.

Sugar cane growers have been demanding their rights for many years. The most recent protest action was by the sugar cane growing peasants of Tenkasi in Tamilnadu in December 2020. These sugarcane growers have been agitating for the payment of arrears of Rs.24 crores due to them. Earlier, in September, peasants affiliated to the Tamil Nadu Sugarcane Farmers’ Association staged a demonstration outside the Madurai Collectorate, urging the Central and State government to increase the Fair and Remunerative Price (FRP) of sugarcane to Rs. 5,000 per tonne and ensure that the mills settle the arrears due to them.

In November 2019, Karnataka sugar cane growers had to agitate for their arrears of Rs. 1.9 crore. In January 2019, UP peasants agitated for their arrears from sugar mills. A single mill in the state owed the growers Rs.80 crores for the 2018-19 season and Rs.120 crores for the 2019-20 season. The peasants expressed their anger with the district and the state administration, who have not taken any action against such errant mills.

In 2018 too, sugar cane growers of Western UP carried out their agitation for more than 15 days in Meerut, demanding that the government ensure that pending dues of sugarcane growers are settled.

With all this evidence, it is clear that the government’s claim of benefiting millions of peasants is yet another outright lie that seeks to divert attention from the facts on the ground. The central and state governments work in the interest of the capitalists and not in the interests of peasants. This is the truth.

It is precisely because crores of peasants are recognising the truth, that the Kisan Andolan is causing sleepless nights for the capitalist ruling class. Lakhs of peasants across the country are demanding their right to security of livelihood and opposing laws that threaten to enslave them to monopoly capitalist companies.


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