MY AGRI JOURNEY CONTINUES-TALES OF SUGARCANE FARMERS .
MY AGRI JOURNEY CONTINUES-TALES OF SUGARCANE FARMERS .
Sugarcane rates are more stable as it is decided based on fair & remunerative price (FRP) fixed by GOI annually coupled with sugar recovery. Hence the minimum guarantee is assured to farmers.
Due to prevailing zonal system of cane movement regulation, farmers are automatically tied up with sugar unit located in the respective zone. Factories arrange crop loans from banks based on the cane purchase agreements, due to which the tenant farmers, defective title land holders ,also get easy access to loans, which was not case with regular crop loans. Few factories lure farmers with notional subsidies in the form of seed, fertilisers etc , but finally adjust in the cane pricing.
Though Rangarajan committee on sugar industry formed during UPA Govt,came out with sound recommendations in favour of farmers , like free zone, comprehensive pricing formula for cane considering value for baggase, Molasses and other products etc, it was not implemented, for the reasons best known to everyone. MS Swaminathan report on MSP for other crops also is kept pending.
Sugarcane is rough crop ,which can withstand drought, cyclones, floods etc and minimum guaranteed tonnage will come. Due to this advantage of assured yield and support price, small farmers take up cane cultivation, harvest and transport with bullock cart on their own and save on labour costs. Similarly due to minimum assured guarantee of the crop and easy access to credit, enterprising farmers take up large chunks of lands on lease and cultivate sugar cane.
In our area KCP Sugars , Vyyuru is most successful sugar unit and still having sufficient cane for crushing, despite the fact that almost all other sugar units in coastal AP like Andhra sugars, Sarvaraya, Deccan, Delta, Jaipore etc are operating at less than 40% capacity and few have stopped operations.
The main reason for reduction in cane area in this region is due to severe shortage of harvesting labour. In this agrarian rich region, labour are not interested in handling tough jobs like cane harvesting. Farmers has to pay huge advances and get these batches from Srikakulam, Tuni and Markapur areas. There are many incidences of big farmers loosing heavily on these advances. In few cases, factories tried engaging harvesting labour and met with little success.
One harvesting batch consist of 10 members including cook. Farmers has to arrange shelter, food. One batch can harvest and load about 12 tons a day and this year they are paid @ Rs 500/ton. Including transportation, farmer is incurring about Rs 800/ton as harvesting cost, which is about 27% of cane price ( Rs 3000/ton).
As this is a major cost and next to land lease amount and risk of loosing advances to batches are increasing year after year and factories are not coming forward to take the responsibility of harvesting, farmers are moving away from cane cultivation, though still it is one crop which never push farmer into dark and desperate situation. It is observed that once farmer shift to other crops from cane, it is very difficult to get him back to cane cultivation again.
Though factories, research centers are putting efforts to develop cane harvesters suitable for our field conditions and size of holdings, so far they met with very little success. As we follow ridge and furrow systems, the small harvesters are cutting the cane leaving a small piece below, which is loss to farmers. Few other models where can can be chapped into pieces also have other defects. There is immediate need to address cane harvesting problem and find out appropriate solutions, otherwise the sugar industry will have natural death in others areas too like it happened in Godavari dists of AP.
This season in Krishna delta the yields are averaging about 40 tons/ acre and gross realization of Rs 1.2 lakhs/acre. The cost of cultivation include land lease 0.4 lakhs, harvesting 0.32 lakhs, crop management including 15 bags fertilizers, FYM, weeding and allika etc 0.35 lakhs.
The farmer net income is around Rs 18000/acre in a year.
This is the situation of the sugarcane farmer in a area gifted with rich soils with abundant water resources and also this is the best year with timely rainfall and zero natural calamities.
If we are not in position to improve farmers incomes in best possible situation like assured market tie up, concessional crop loans, with a crop which can withstand natural calamities etc, how can we even dream about doubling farmers incomes?
Some very serious micro analysis followed by deliberations and macro level policy interventions are seriously required to alter the present situation.
Sugar factory owner to put up 5000 TPD plant with 30 MW cogen and 60 KLD distillery is investing about 200 cr ( that to about 90% public money through bank loans). To supply cane to this size unit farmers has to grow cane in 12500 acres ( 40 tons ave/acre) and the land value is 1250 crores ( 10 lakes/acre). With more than 6 times investment what farmer gets in this sugar chain is peanuts when compare to ROI of the mill owner.
SERIOUSLY ADDRESSING THESE EQUITY & EQUALITY ISSUES WILL EVER HAPPEN??
B G Reddy-9866889246
grbonthu@gmail.com
Sugarcane rates are more stable as it is decided based on fair & remunerative price (FRP) fixed by GOI annually coupled with sugar recovery. Hence the minimum guarantee is assured to farmers.
Due to prevailing zonal system of cane movement regulation, farmers are automatically tied up with sugar unit located in the respective zone. Factories arrange crop loans from banks based on the cane purchase agreements, due to which the tenant farmers, defective title land holders ,also get easy access to loans, which was not case with regular crop loans. Few factories lure farmers with notional subsidies in the form of seed, fertilisers etc , but finally adjust in the cane pricing.
Though Rangarajan committee on sugar industry formed during UPA Govt,came out with sound recommendations in favour of farmers , like free zone, comprehensive pricing formula for cane considering value for baggase, Molasses and other products etc, it was not implemented, for the reasons best known to everyone. MS Swaminathan report on MSP for other crops also is kept pending.
Sugarcane is rough crop ,which can withstand drought, cyclones, floods etc and minimum guaranteed tonnage will come. Due to this advantage of assured yield and support price, small farmers take up cane cultivation, harvest and transport with bullock cart on their own and save on labour costs. Similarly due to minimum assured guarantee of the crop and easy access to credit, enterprising farmers take up large chunks of lands on lease and cultivate sugar cane.
In our area KCP Sugars , Vyyuru is most successful sugar unit and still having sufficient cane for crushing, despite the fact that almost all other sugar units in coastal AP like Andhra sugars, Sarvaraya, Deccan, Delta, Jaipore etc are operating at less than 40% capacity and few have stopped operations.
The main reason for reduction in cane area in this region is due to severe shortage of harvesting labour. In this agrarian rich region, labour are not interested in handling tough jobs like cane harvesting. Farmers has to pay huge advances and get these batches from Srikakulam, Tuni and Markapur areas. There are many incidences of big farmers loosing heavily on these advances. In few cases, factories tried engaging harvesting labour and met with little success.
One harvesting batch consist of 10 members including cook. Farmers has to arrange shelter, food. One batch can harvest and load about 12 tons a day and this year they are paid @ Rs 500/ton. Including transportation, farmer is incurring about Rs 800/ton as harvesting cost, which is about 27% of cane price ( Rs 3000/ton).
As this is a major cost and next to land lease amount and risk of loosing advances to batches are increasing year after year and factories are not coming forward to take the responsibility of harvesting, farmers are moving away from cane cultivation, though still it is one crop which never push farmer into dark and desperate situation. It is observed that once farmer shift to other crops from cane, it is very difficult to get him back to cane cultivation again.
Though factories, research centers are putting efforts to develop cane harvesters suitable for our field conditions and size of holdings, so far they met with very little success. As we follow ridge and furrow systems, the small harvesters are cutting the cane leaving a small piece below, which is loss to farmers. Few other models where can can be chapped into pieces also have other defects. There is immediate need to address cane harvesting problem and find out appropriate solutions, otherwise the sugar industry will have natural death in others areas too like it happened in Godavari dists of AP.
This season in Krishna delta the yields are averaging about 40 tons/ acre and gross realization of Rs 1.2 lakhs/acre. The cost of cultivation include land lease 0.4 lakhs, harvesting 0.32 lakhs, crop management including 15 bags fertilizers, FYM, weeding and allika etc 0.35 lakhs.
The farmer net income is around Rs 18000/acre in a year.
This is the situation of the sugarcane farmer in a area gifted with rich soils with abundant water resources and also this is the best year with timely rainfall and zero natural calamities.
If we are not in position to improve farmers incomes in best possible situation like assured market tie up, concessional crop loans, with a crop which can withstand natural calamities etc, how can we even dream about doubling farmers incomes?
Some very serious micro analysis followed by deliberations and macro level policy interventions are seriously required to alter the present situation.
Sugar factory owner to put up 5000 TPD plant with 30 MW cogen and 60 KLD distillery is investing about 200 cr ( that to about 90% public money through bank loans). To supply cane to this size unit farmers has to grow cane in 12500 acres ( 40 tons ave/acre) and the land value is 1250 crores ( 10 lakes/acre). With more than 6 times investment what farmer gets in this sugar chain is peanuts when compare to ROI of the mill owner.
SERIOUSLY ADDRESSING THESE EQUITY & EQUALITY ISSUES WILL EVER HAPPEN??
B G Reddy-9866889246
grbonthu@gmail.com
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