Soft Loans To Sugar Barons, 'Eligible' Suicide To Farmers

By Samar

03 December, 2015
Countercurrents.org

1300 farmers killed themselves in Maharashtra by 30 June, as per state government’s own admission, with half of the year to go. Ongoing drought in Marathwada was supposed to deepen the crisis and so it did with toll reaching 997 there alone by 30 November 2015. The total toll for the state has crossed 2400 as against 1981 farm suicides it admitted in 2014.

The government also concedes that many of these are in fact ‘eligible’ farm suicides, i.e. the land was in the victim's name and there was indeed evidence of indebtedness. Even if one forgets the absurdity of such ‘eligibility criteria’ that deny women, who hardly ever have lands in their name in patriarchal societies, and landless labourers even after death, the numbers are significant.

Maharashtra government conceded in the state assembly that 722 out of 1300 farm suicides by 30 June were indeed ‘eligible’ suicides. Revenue officials have also admitted to 626 out of 997 farmers’ suicides in Marathwada being ‘eligible’ for suicides and therefore deserve compensation. It is yet to start compensating them is just another fact.

It is not, however, always that slow in dealing with distress, not when it affects the sugar mill owners at least. Poor guys owed sugar cane farmers, many of whom figure in the farm suicides statistics, just about Rs 2,532.49 crore to Maharashtra farmers whose sugarcanes they bought and did not pay for. They could not because of falling sugar prices of course, as Union Minister for Consumer Affairs, Food and Public Distribution (hereafter Food Minsiter) Minister Ram Vilas Paswan told Lok Sabha in February. "The outstanding sugarcane dues are mainly on account of low realisation from sale of sugar," he had said in a written reply to a question. The fact that not a single sugar mill owner has reportedly committed suicide unlike thousands of farmers is beside the point.

People in the power are not always heartless so that ran to address the crisis. Well aware of the crisis and its impact on farmers, the Union Government had approved a Rs. 6,000 crore interest-free loan to sugar mills to enable them to clear cane arrears payable to farmers way back in June this year. The gazette notification for the same was issued by the Department of Food and Public Distribution and can be accessed here.

This was, interestingly, not first such package for sugar mill owners to bail out farmers- the incumbent union government had given interest free loans of Rs. 4,400 crore to sugar industry for paying cane arrears in June 2014 as well, soon after coming to power after the general elections in May 2014.

This is not to suggest that the one in power before them were any less concerned over the agrarian crisis ensnaring live of thousands of farmers including those cultivating sugar cane and not getting paid despite selling that to the mills for crushing. It had also approved interest free loan of Rs. 6,600 crore for the mills and that too exclusively for clearing sugarcane arrears.

It is just that not much of the interest free loans seem to have reached the farmers if one goes by the data provided by the government itself. The total payments sugar mills owed to the farmers in June 2014 was pegged at 11,000 crore. The amount, as per Food Minister Ram Vilas Paswan’s own admission again, rose to Rs 16,364 crore by February 2015 and to a whopping Rs 21,000 crore by April. Out of these arrears, Uttar Pradesh sugar mills owed the farmers the maximum at Rs 7,870.57 crore, followed by Maharashtra at Rs 2,532.49 crore and while the same stood at Rs 2,154.97 in Karnataka.

The government, of course, makes the claim that the money owed by the sugar mills have come significantly down to Rs 12,248 crore at the end of the 2014-15 season. Have a cursory look at the figures and the lie gets busted. The arrears that stood at Rs. 11,000 crore at the end of 2013-14 seasons reached to Rs. 12,248 crore at the end of the 2014-15. That is a clear increase of Rs. 1248 crore from last season, not a ‘reduction’, significant or otherwise because of whatever relief measures the government claims to have pressed in service.

Where did all the money given to the sugar mills for helping the farmers go, then? Though the answers to that question are not very clear, it having been used to keep the sugar mills afloat, most of them privately owned with a very small chunk being under cooperatives. Their might be more leakages as evidenced by the admission of officials themselves, take this statement attributed to a senior government official from the co-operative and marketing department of Maharashtra quoted in this media report for instance-

“Banks should ensure that the amount is given to farmers only. Banks need to play a crucial role. Otherwise, it happens that the money is taken from the government but never reaches the farmers. We hope that all sugar mills will implement this decision in the larger interest of the farmer community,"

Another possibility is part of the funds getting actually paid to the farmers for what the mills owed them for their produce from past years. Even that, however, does not change their predicament as they would need to spend that money for meeting the expenditures warranted from the last year as well- be it on education of their children, marriages and other social responsibilities, money required for everyday needs and also on medical needs- routine as well as urgencies.

Clearly, such soft loans to sugar mills cannot address the crisis of the farmers, crisis they have to deal with day in and day out with payments for their produce a year, or more, later! Sugar mill owners can wait for government bailouts for sure, farmers do not have this luxury is a fact that keeps surfacing in farm suicides statistics. Add to this the fact that many of the private defaulters do not have their businesses confined to sugar industry alone. Many of them have a very diverse portfolio that includes huge profit making businesses based even on the byproducts of the sugarcane crushing- ethanol refineries for instance.

Why do the governments, then, keep bailing out the industrialists and not the farmers? The answer to this question is simple- the industrialists are indispensable to the syatem that masquerades as democracy in India, the farmers- divided over a hundred fault lines- are not. The industrialists fund political parties and their electoral campaigns, farmers cannot. Further, helping ‘industry’ goes well with the dominant ‘growth and development’ discourse propagated by powers that may across the world whereas helping farmers comes under ‘subsidies’ that need to be done away with.

Sadly, with so many farm suicides, the state of affairs cannot continue without having serious consequences to both- the society and the republic. And the republic cannot solve the farm crisis by baling out sugar barons. It needs to come up with something that addresses the real problems ailing both the farmers and the industry which too, undoubtedly, had seen sugar prices crumbling down. Keeping mills afloat with public money and thus making farmers keep growing sugarcane with diminishing to no returns and thus getting forced into killing them cannot be a solution to the problem.

Samar is Programme Coordinator - Right to Food Programme Asian Legal Resource Centre / Asian Human Rights Commission, Hong Kong