The AIKS Condemns the latest decision of the Government to appease the Sugar lobby

The AIKS Condemns the latest decision of the Narendra Modi led Government to appease the Sugar lobby by doling out further benefits to them without any concrete action by them to clear the arrears due to the Cane Farmers which by the Government’s own admission is 110 billion rupees ($1.84 billion). This is in continuation of the policies of the Congress-led UPA Government which in December had approved Rs.6,600 crore interest free loans for the sugar industry exclusively for clearing sugarcane arrears. The present Government has extended this to allow Corporate Sugar Mills to avail additional interest-free loans of up to Rs.4,400 crore from banks which will add up to Rs.11,000 crores altogether. However, in reality the Sugar Mills have not yet cleared the dues of Cane Farmers. For instance in Uttar Pradesh alone the arrears due to farmers are more than Rs.4,400 crores. While the move was apparently intended to increase the cash flow to the Corporate Mills to make payments of Cane arrears, the flow never reached the Cane Farmers. 

The Government has announced that it will raise the import duty on Sugar to 40 percent from 15 percent and will consider other incentives for Mill owners. While AIKS stands for increased import duties in Sugarcane the Government has taken no steps to ensure that the benefit of such an increase will accrue to the Cane Farmers. Although there is surplus in the domestic market with 20-25 lakh tonnes the Sugar lobby will use the opportunity to further increase Sugar prices for the consumers. In pursuance of the Rangarajan Committee recommendation that Sugar import-export policy should not be linked to domestic availability, this decision is silent about having quantitative restrictions on Sugar imports. The Committee had argued for promoting exports on the ground that even though India contributes 17 percent to the global sugar output, its share in exports is only four per cent. It also keeps the doors open for imports from outside as well as the possibility of dumping of sugar by calling for an outright ban on quantitative restrictions. 

India had increased the subsidy for raw sugar earlier this month on the pretext of boosting output and exports to the tune of Rs 3,300 per tonne. This has been extended on sugar exports until September. This has not benefited in terms of remunerative pricing for Farmers. The long standing demand of Cane Farmers for getting a remunerative price of Rs.3,500 per tonne however is not accepted. Notably the MSP announced for 2014-15 is only Rs.2,200 per tonne. While farmers bear the brunt of falling global prices, the Corporate Mills earn huge profits when global prices rise without transferring any benefit to Farmers. Companies also benefit hugely from by-products like ethanol, press-mud etc while the Farmers are not compensated for these products. 

The move is only aimed at promoting profits of Corporate Sugar Mills without addressing the problems of the Cane Farmers. AIKS calls upon all units to protest against this move by the Government and will hold a Consultative meeting of Farmers from Sugarcane growing States on 23rd July to chalk out the future struggles against these policies