Bangalore: G.K. Chandru looks much older than his 46 years. His face is lined with deep wrinkles, and his cheeks are hollowed out. It is as if Chandru, who almost never smiles, is grieving over something. He is: Chandru has just given away 20 tonnes of sugar cane as firewood.
C.S. Bharathi (centre), whose husband Thimmappa, of Yelekere village, committed suicide in September when he could not repay a loan despite selling 6 acres, says she now has just over half an acre
Chandru is a farmer in Mandya, a district in Karnataka’s sugar bowl that is located around 90km from Bangalore.
Farmers in the area have traditionally been prosperous but a combination of factors has wreaked havoc on their finances. Like the cotton farmers in Maharashtra’s Vidharba region, some have started resorting to suicide to escape an unbearable debt burden.
According to political activists in the region, there have been around 70 suicides since the beginning of last year. The government claims there have only been 16.
The crisis in Mandya is a result of a glut in production of sugar cane which has been accompanied by a fall in the international price of sugar. Sugar prices move cyclically but, this time, Mandya’s farmers have been hit hard.
The problem of high production and low sugar prices isn’t restricted to Karnataka. World sugar production will outpace demand by 11.1 million tonnes (mt), largely on the back of higher production by India and China, the London-based International Sugar Organization, an industry body, said on 6 December.
Some Indian states have addressed the problem by mandating that sugar mills pay cane producers more.
The Uttar Pradesh government has asked mills to pay farmers Rs1,250 for a tonne of sugar cane. Uttar Pradesh is India’s second largest sugar producer after Maharashtra.
In Karnataka, mills still pay farmers Rs850 a tonne. Over the past few months, the Karnataka Rajya Raitha Sangha (KRRS), a farmers’ association, has been staging protests across the state demanding the government raise the price to Rs1,100.
Sugar in India is as political a business as it gets. Uttar Pradesh’s decision to up prices—challenged in the Supreme Court, which on 18 January stayed a lower court’s order allowing mills to pay Rs1,100 a tonne instead of Rs1,250—was prompted by a desire to shield farmers, a powerful voting block. However, the sugar lobby and the liquor lobby (liquor companies use a by-product in sugar manufacturing) have a say in influencing the decision of state governments that decide the purchase price of sugar cane.
The price mills pay for sugar cane also has a bearing on their profitability. Following the Supreme Court decision, Amit Mahawar, an analyst with HDFC Securities, said, “Sugar-cane prices continue to be high for mills to make any profit,” and that mills would “struggle” unless “cane cost is linked to the market price of the finished product.”
Meanwhile, sugar mills are addressing the issue by not “picking” cane from farmers.
In Chandru’s case, a mill picked 30 tonnes of sugar cane three months ago, although he claims the price he got on this was not enough to recover the costs he incurred. Cane that isn’t picked is virtually worthless. And the quantity of sugar a mill extracts from cane depends on when it was picked. The lower the time lag between cane being picked and crushed, the higher the output.
With an estimated 5,478.9 hectares (ha) of mature cane remaining uncrushed out of last year’s crop in Karnataka’s mills, Chandru, with his 1 acre plot, is not alone in his misery.
Over the past few months, many farmers have chosen to burn their crops than let them dry up and die, a move to they have been driven by desperation. “Till last year, we never heard of farmers setting their crops on fire,” says V. Ashok, secretary of KRRS. And certainly not in Mandya.
Before it was carved out of the larger Mysore district, some of the best engineering minds at the turn of the last century, such as the British chief engineer Major Sankey and M. Visveswaraya, former dewan of Mysore state, designed an extensive irrigation network for the region.
In 1911, work began on the Krishnaraja Sagar dam across the Cauvery river. Its canals now irrigate more than 15% of the district’s area. In 1932, the Mysore Sugar Co. Ltd (Mysugar) factory began crushing cane. Today, it is the only government-run factory out of a total of 47 sugar factories owned privately and by cooperative societies in the state.
In the 1960s, Mandya was chosen for a Centre-sponsored intensive agricultural programme because of the availability of water and the presence of efficient cooperative societies. For the same reasons, the Mandya farmer has always been perceived as better-off than his counterparts.
In the past few years, however, things have changed. A sugar cane crop takes 12 months to mature and factories usually start crushing operations in July. This year, Mysugar, which can crush up to 3,000 tonnes a day, began lifting cane only by September. There are four other factories in the district, all privately run, including the Pandavapura Cooperative Sugar Factory, which was leased out to a private firm in 2006.
With the price of sugar cane around Rs300 less than the year before, most farmers such as Chandru, say they have not been able to realize their capital and, thereby, they have not been able to repay the Rs18,000 bank loan they are entitled to per acre. It can cost up to Rs25,000 to raise an acre of sugar cane, and the yield per acre could vary 50-80 tonnes.
Meanwhile, farmers who aren’t registered with factories—the way sugar-cane procurement works is that farmers in a particular area register with a local mill, a process that guarantees supplies for the mills and should, in ideal circumstances, translate into assured “picking” for the farmers—have been selling sugar for as low as Rs200 a tonne to local jaggery units, which, together, crush around 1mt a year. Mills in the area will crush around 4mt of sugar this year (2007-08).
Meanwhile, the suicides continue unabated.
“The cause for these deaths is the high interest rate of 10% local moneylenders charge,” says KRRS president K.S. Puttanaiah, who says the number of suicides is much higher than the government’s reported number of 16 cases between April and December.
One such unreported suicide was that of Thimmappa, 40, of Yelekere village who, according to Puttanaiah, hung himself in September when he could not pay off his debts despite selling his 6 acre plot in parts over the past few years. His wife, C.S. Bharathi, says she is now left with a little more than half an acre.
“The family lost its sugar-cane yield when water supply was stopped from a main irrigation canal due to a shortage some years ago and they have never recovered from the loss,” says Dayanand, a resident of Yelekere village.
Another farm worker from the village, Dhanapal, committed suicide just a few days after Thimmappa’s death, but that too was not reported. The local police station says it has no record of these deaths. “The cases are reported only when the victims’ families can claim compensation from the government,” says Puttanaiah.
Different factors, or the accumulation of them, are responsible for farmer suicides, says G.K. Veeresh, a former vice-chancellor of the Bangalore-based University of Agricultural Sciences, who was tasked with investigating 136 farmer deaths in the state in 2002 by the government. “We found many victims were ambitious farmers who could not realize the big investments they made. But many fake cases were also made out.”
Sugar cane and paddy are the most widely grown crops in Mandya, with the former being grown on 57,330ha in 2006-07.
Rice requires more water, a commodity that is in short supply now in the region after more than 70 years of assured supply. The region’s 450 tanks need rejuvenation, but successive governments have neglected them, says Ashok.
“Sugar cane was the only profitable crop here, but not any more,” he adds.
The mills themselves admit cane prices are not what they should be.
“We agree that the prices being paid are not remunerative. But it should be better next year, if more exports take place,” says M. Srinivaasan, president of the South Indian Sugar Mills Association, who runs the Sri Chamundeshwari Sugar Mills in Mandya.
Meanwhile, even as Mandya’s farmers are grappling with their problems, demand for fallow land, even waste land, in the region has increased. The cost of land all along the Bangalore-Mysore highway has shot up and many people have sold off their properties. “A gunta (roughly 1,100 sq. ft) which used to cost a few thousands near Mandya now costs about Rs1 lakh,” says Ashok.
Bloomberg’s Thomas Kutty Abraham contributed to this story.