In Karnataka's Belgaum, sugarcane farmers are being pushed to the edge by rising costs, price drops and long-pending arrears

In north Karnataka, sugar factories are owned by powerful politicians across the spectrum who hold considerable sway in their regions

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Belgaum: Karnataka is the third largest grower of sugarcane in India, but it also owes its cane farmers Rs 3,990 crore as of 2018-2019 (almost Rs 900 crore more than it did four years earlier). Karnataka has 11 of the 100 leading sugarcane producing districts of the country, spread across both the southern regions of Mandya, Mysore and Chamrajnagar, and Belgaum, Bijapur, Bidar, Raichur and Bagalkot in the north.

In arid Belgaum, where 35 percent of the state’s sugarcane is grown, farmers are a harried lot. On top of declining production, rising costs of cultivation and drop in support price for the crop, they have to weather long-pending arrears from cane crushing and sugar manufacturers. Their dramatic protest last November, of gatecrashing the Vidhan Soudha compound in Belagavi with tractors and lorries laden with sugarcane, was not good optics for the new JD(S)-Congress government. Chief Minister HD Kumaraswamy made things worse when he responded sarcastically to a woman farmer and also alleged that the protests were "politically motivated".

Angry farmers — this time not just from Belgaum — descended on Bengaluru that very weekend demanding sugarcane MSP be increased from Rs 2,500 per tonne to Rs 3,000. They argued that the MSP for per ton is Rs 3,500 in Maharashtra, Rs 3,500 in Punjab and Rs 3,000 in Haryana. No significant announcement followed the resulting talks between the chief minister, farmer leaders, cane growers and mill owners.

The meeting happened in Vidhana Soudha where the mill owners must have felt quite at home, considering most of them are also politicians. There are 65 sugar factories in the state, of which 58 are functional. There are 22 factories in the cooperative sector, with only two factories under government control, 34 are privately owned, of which 33 are owned by political leaders. In north Karnataka, sugar factories are owned by powerful politicians such as Prakash Hukkeri, MB Patil, Murugesh Nirani, Umesh Katti and Siddi Namagowda.

Of the 60-odd sugar factories, only two are state-owned; the rest are in the private and cooperative sector. And among the 34 mills in private hands, 33 factories are owned by political leaders. In north Karnataka, sugar factories are owned by powerful politicians across the spectrum who hold considerable sway in their regions irrespective of which government is sitting in Bengaluru.

In fact, during the November protests, the Karnataka State Sugarcane Growers Association asked the state government to amend the Karnataka Sugarcane (Regulation of Purchase and Supply) Act, 2013, to include provisions for imposing penalty and putting behind bars mill owners who do not pay dues to farmers. Such a provision had become a necessity to protect farmers’ interests, they felt, considering most of the mills by are owned by ministers, MLAs and MPs.

Parties give these farmers no option but to vote into office the very people who push them into debt. Once prosperous thanks to fertile soil, plenty of water and a reasonable price for their produce, sugarcane farmers today are reeling under declining yield due to drought conditions for the past three years and deteriorating soil quality.

The average yield of sugarcane in Karnataka (and with it, the state’s contribution to national production) has reduced from a high of about 101 tonnes per hectare in 2009-2010 to 73 tonnes per hectare in 2016-2017, largely because of continuous irrigation, indiscriminate use of fertilisers and the practice of ratoon or stubble cropping.

Karnataka sugarcane farmers have threatened to strike unless their demands are met. Manjunath Somaraddy

Karnataka sugarcane farmers have threatened to strike unless their demands are met. Manjunath Somaraddy

There is also criticism that the farmers have also been slow to adopt new farming technology like drip irrigation. “Farmers should learn new ways of agriculture and concentrate on other crops,” said Vishwanath Udagatti, a young farmer of Mudhol. Udagatti is an engineer who gave up a job in Australia to take up farming. “Farmers use too much water. What they use for one acre, I use for three acres. Drip irrigation is best. Maharashtra made drip irrigation mandatory for sugarcane growers. The Karnataka government gives subsidy for drip irrigation but it is not being properly utilised.”

Vishwanathan pointed out that it costs Rs 50,000 per acre to install an ISI certified drip irrigation system, with the state giving a subsidy of Rs 35,000. “I installed a non-ISI drip irrigation system for just Rs 10,000 per acre. But other farmers are not interested in installing drip irrigation.” Worse, the yield has further plummeted in the past two years. “We used to grow 60 to 80 tonnes per acre but now it is just 30 to 40 tonnes,” said Muttappa Komar, a farmer of Ingalagi and a member of Raita Sanga, a farmers organisation. “The rate too came down from Rs 3,010 per tonne in 2016-2017 to Rs 2,150 per ton. Then there is the cost of harvesting and transportation. We get no income from growing sugarcane as we have to clear the loans taken for seeds and fertiliser.”

The farmers’ biggest problem, however, remains the factories that buy their cane, but don’t clear payments on time. “We get the first payment three months after supplying cane,” added Muttappa. Even though the Sugarcane (control) order, 1966, mandates payment within 14 days of purchasing the cane failing which the sugar factories are supposed to pay an interest of 15 percent per annum on the remaining amount due. But mills are allegedly flouting the order with impunity. “A few factories of Belgaum have not cleared the dues of ten years back.” said Muttappa.

“India produces 35 million lakh tons of sugar per annum but consumes only 26 million lakh tons,” said Dr RB Khandagavi, director of Nijalingappa Sugar institute Belgaum. “The excess stock remains in the factories. The market price of sugar has also not been attractive, so factories delay payments to farmers and struggle to pay fixed remunerative price (FRP) price.”

On the issue of arrears from the sugar units, Vishwanathan alleged that factory owners are cheating farmers by claiming they are running under heavy losses. They also pollute groundwater by dumping their waste in ponds and canals, Vishwanathan said. “The sugar mill here has polluted the environment of Mudhol. Black ash, spent wash (wastewater of distilleries), chemicals and carbon have polluted the environment, soil and water sources of the area. Mudhol has around 4,000 cancer cases and its residents have gone to the Supreme Court and National Green Tribunal.” He protested the release of spent wash from mills into the water channels and accompanied the District Environment Officer for a spot visit. The hearing is on.

Another problem is the complicated payment formula, which farmers are unable to comprehend. This formula, devised by the Rangarajan Committee in 2012, proposed decontrol of sugar and for sugar mills to pay farmers an FRP plus a share in its revenue, based on the publication of half-yearly ex-mill prices and values of sugar and by-products like ethanol, molasses and bagasse, which make up about 15 percent of production.

The commission recommended an FRP of Rs 275 per quintal at 10 percent sugar recovery level for 2018-2019 (meaning one ton of sugar from 10 tons of cane). As per the rules, the FRP is to be paid to the farmer up front with the second installment being a percentage of the mill's revenues. But most mills are yet to pay farmers the second installment after paying the upfront purchase price.

This revenue sharing formula, adopted by Maharashtra and Karnataka, has not worked. Farmers have little knowledge of the products, prices and revenue earned by the mills. Farmers are now demanding that the state switch to State Advised Price (SAP), which gives farmers a fixed amount based on input and other production costs and involves no revenue sharing. In fact, in 2013-2014, Karnataka had decided to adopt SAP. But factory owners prevailed on the state government to retain the revenue sharing formula.


“The revenue sharing system is unscientific,” added Kodihalli Chandrashekhar, president of Karnataka Rajya Raita Sangh and Hasiru Sene (green army). “SAP was farmer friendly which the FRP is not. Fixing the recovery rate at 10 percent is also arbitrary. Also, the Centre released Rs 5,000 crore to enable factories to clear farmers’ dues, but no farmer has benefitted.”

Perhaps any lack of punitive action against mill owners for not clearing farmers’ arrears is because most mills — take for instance the ones in Bagalkot — are owned by MLAs: Murugesh Nirani’s Nirani Sugars limited, Sai Priya sugars and MRN sugars, Nyamagouda’s Jamakhandi Sugars Limited, SR Patil’s Bilagi Sugar Mill Limited, and Shamnur’s Gudagunti’s Prabhulingeshwar Sugars.

“Payments of Rs 310 a tonne in 2016-2017, Rs 500 tonne in 2017-2018, and the remaining payment for 2018 (the first payment Rs 2,150, against the FRP of Rs 2,750, has been made) are pending,” said Gangadhar Meti, a farmer from Mahlingapur. “Before the start of the 2018-2019 season, when we went on strikes and hartals, the state government allowed the factories some time to pay the dues and had taken bonds from them for this, but our bills are not yet cleared. We are struggling to arrange money for school fees of our children, marriages and agricultural expenses,” added Gangadhar Meti. “Unless the government solves our problems soon, we will continue our strike.”

The author is a Belgaum-based freelance writer and a member of 101Reporters

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