Sugar bowl in turmoil: NCP’s citadel stands shaken

by Abhay Vaidya  Nov 14, 2012 19:28 IST

#ConnectTheDots   #NCP   #Raju Shetty   #Sharad Pawar   #Sugarcane  

On 12 November, reliable information came in from Baramati that Union Agriculture Minister and NCP president Sharad Pawar appeared "restless and disturbed" at his farmhouse in Baramati.

He was not the usual relaxed self that he is during Diwali when he’s at home for a traditional family gathering and there’s peace and cheer all around. What was bothering him? Was something happening in national politics? Had Arvind Kejriwal latched on to something damaging?

As it turned out, the simmering sugarcane farmers’ agitation in the heart of western Maharashtra’s sugar bowl, led by the dynamic independent MP from Kolhapur district, Raju Shetty, had taken an explosive turn.

Tension in Maharashtra sugar belt. Reuters

Farmers demanding higher cane price from sugar cooperatives, had turned violent after hearing of Shetty’s detention by the police at Indapur in Pune district. At Nandre village in Sangli district, a farmer was killed in police firing which occurred after a lathi-charge when the farmers allegedly tried to lock a police team inside a restaurant in the village.

Another farmer had died at Indapur the same day when the truck tyre he was trying to deflate, reportedly exploded.

The impact of this tragedy in the rural heartland of western Maharashtra stood magnified and further intensified the agitation because two farmers had lost their lives during Diwali when the entire nation was bursting crackers in celebration. From a localised, regional affair, this agitation had suddenly changed scale and could now have serious repercussions on the 2014 elections. With the prime sugar bowl districts of Satara, Sangli, Kolhapur and Pune constituting an important base for the NCP, Pawar has reasons to be worried.

Maharashtra and Gujarat are two of India’s states which are showcased as examples where the farmers’ cooperative movement has taken firm roots.

Gujarat has the example of the Gujarat Co-operative Milk Marketing Federation at Anand, famous by its brand name Amul. Likewise, Maharashtra also has a fine network of flourishing dairy cooperatives like Warna, Mahanand, Krishnai, among others, anchored in the taluka-level farmers’ associations across many districts.

In Maharashtra, the milk cooperatives were preceded by the sugar cooperatives, starting with the pioneering efforts of Vitthalrao Vikhe Patil at Loni, Ahmednagar district in 1948. Since then, sugar cooperatives have taken deep roots in the well-irrigated parts of the six districts of western Maharashtra, namely Satara, Sangli, Kolhapur, Ahmednagar, Pune and Solapur and have also spread out to other parts of the state, including Marathwada.

Maharashtra is today the leading producer of sugar in the country with an annual turnover of Rs 25,000 crore, with more than 200 registered factories of which 195 were functioning in 2011, including 165 from the cooperative sector. Firmly controlled by Congress and later the NCP politicians who were part of the same stock, Maharashtra’s "sugar lobby" has always had the state in its grip. A number of chief ministers such as Vasantdada Patil, Vilasrao Deshmukh, Sharad Pawar and a host of powerful politicians such as the Vikhe-Patils of Ahmednagar, the Mohite-Patils of Solapur and Patangrao Kadam of Sangli, draw their strength from sugar cooperatives.

However, the dominance of politicians over the cooperatives has been its bane, turning many of these factories into inefficient white elephants, mismanaged and over-staffed by people accommodated for political reasons.

For example, as many as 71 or 40 percent of the factories were declared sick in 2011. Their inefficiency stemmed from corruption, lack of professional management, heavy debt and short margins, compounded by fluctuation of sugar prices in the international market, and domestic policies relating to exports, de-control and the levy system.

Rather than force the sugar cooperatives to perform or perish, the Congress-NCP governments have repeatedly bailed them out through loans inspite of poor production or outright losses, much to the chagrin of the opposition and industry experts. Given their poor efficiency, many sugar cooperatives have been unable to pay a satisfactory price to farmers for their sugarcane and this has been a point of friction all along.

Beginning in the late 1980s, the Shetkari Sanghatana leader Sharad Joshi who had tasted success with his ‘onion agitation’ in Nashik district, took on the sugar barons in western Maharashtra by demanding remunerative price for sugarcane. He also insisted that the cooperatives should not make compulsory deductions from the dues of farmers towards a host of welfare funds including establishment engineering and medical colleges in the name of benefitting farmers.

Independent MP Raju Shetty, who hails from Kolhapur district, is a product of that agitation. In 2004, Shetty founded the Swabhimani Shetkari Sanghatana after parting ways with Joshi and in the 2009 Lok Sabha elections, defeated NCP's two-time MP from the Hatkangle constituency in Kolhapur, Nivedita Mane.

Farmers’ agitations over higher cane price from sugar factories are a recurring story from western Maharashtra. In 2006, for example, when a similar agitation was launched, the farmers organisations demanded Rs 1,800 - 2,200 per ton of sugarcane against the minimum support price of Rs 850 announced by the state government. During that agitation, barely 54 of the 154 sugar factories were able to start their crushing season in mid-October.

In the latest round, Shetty has centered his protest outside the Karmayogi Shankarrao Patil Cooperative Sugar Factory at Indapur in Pune district controlled by Congressman and Maharashtra Cooperative Minister Harshawardhan Patil. Shetty, now lodged in Pune’s Yerawada prison, has not only been pressing for clearance of dues of last year's cane crushing season by many of the 170 sugar factories in the state, but has also been demanding Rs 4,500 per ton of sugarcane including Rs.3,000 as the first advance. So far, sugar cooperatives have agreed to pay Rs 2,300 per ton of cane.

The issue has further intensified with Pawar bringing in the caste factor by accusing Shetty of targeting factories belonging to the Maratha community. Anna Hazare and Arvind Kejriwal have also extended support to Shetty, bringing national attention to this agitation.

What should worry the NCP and also the Congress is the turn this agitation is taking in the short run before the 2014 polls. Raju Shetty is a force to reckon with and the cane farmers agitation has a long history. Unless this issue is resolved satisfactorily now, it could become a pain-point for the NCP and the Congress during the 2014 polls.