Underweighting Sugarcane: Farmers allege mill owners weigh profits while cultivators register losses

A sugarcane cultivator | Photo courtesy: Special arrangement

“There is widespread foul play in weighing sugarcane, especially in Maharashtra and Karnataka,” claims Raju Shetti, founder of the farmers’ outfit Swabhimani Shetkari Sanghatana. “This unaccounted sugar finds its way to the black market, resulting in huge losses for the sugarcane farming community,” he alleges. His astounding statistics were: “In Maharashtra alone, about 132 lakh tonne sugarcane is appropriated annually through such fraudulent measurement processes. The sugar produced from this would be worth around Rs. 4,500 crores. The government thus suffers a loss of Rs. 225 crores in GST every year.”

Acting on such complaints, law enforcement agencies have raided mills in several states. Officials in Karnataka last month raided 21 sugar factories after growers filed similar cases. They alleged that the mills were depreciating the weight of their produce. However, the raids alone have not been able to end the practice.

Sugarcane farmers working in a field | Photo courtesy: Special arrangement

In Maharashtra’s Kolhapur, a farmers’ association invested in a weighing scale to prove their point. They decided to check the weight of their produce before sending it to the mills for crushing. Activists have alleged that scales were tampered with in a mill to the effect that farmers lost around 1.5 tonnes for every 21 tonnes weighed.

“Cane growers in Karnataka suffer losses amounting to over Rs. 2,000 crores annually due to faulty weighing,” claims Kurbur Shanthakumar Kabbu, President of Sugarcane Cultivators Association in the state. “There are 78 mills in Karnataka, and most of these use separate weighing machines for (buying) cane and (selling) sugar,” he adds. This, however, is usual, but he implies that there are lapses. Why do they need different scales, he asks.

In Uttar Pradesh, authorities recently warned sugar mill officials of action if such allegations were established. In such cases, mill officials – including unit heads, Chief Finance Officers, and Information Technology personnel – may face action under the Essential Commodities Act, 1955, and The Weights and Measurement Act, 2011. This decision was announced in December following cane growers’ complaints about faulty mechanisms and methods of weighing at sugar mills.

In the state’s Etawah district, farmer Mukut Singh reiterates that some mills register less weight. He was not able to quantify the amount of the alleged loss but added, “Just imagine that for every tonne of cane, even if a small amount of weight is defrauded using a tampered scale, the kind of money a mill will make through illegal means and the corresponding loss to the poor cultivator.”

According to a farmer leader from Uttar Pradesh, V. M. Singh, the loss can be between “four and ten per cent”. He asks, “why do mills not accept the comparison with a Dharam Kanta (the popular name for an official weighing bridge), which is government approved?”

A sugarcane field | Photo courtesy: Special arrangement

While in Uttar Pradesh, growers have to spend on cutting and transporting sugarcane, in states like Maharashtra, the onus lies with sugar mills, Singh explains. Thus, the costs are higher for a grower in UP. The Uttar Pradesh government, however, offers State Advisory Price (SAP) for the best variety of cane at Rs. 350 per quintal, which is Rs.45 more than the Fair and Remunerative Price (FRP) offered by the Centre. The FRP, based on the sugarcane production cost and an element of assured profit to cover the risk of growers, was announced at Rs. 305 per quintal for the sugar season 2022-23 (October-September). Understandably, the decision to increase or decrease SAP rests largely on political needs, like elections.

This is different in some states like Maharashtra and Karnataka, where farmers are compensated according to FRP, or as with the latter, offer a price over FRP. But cane growers in most states allege that their payments are made in parts and that the payments are irregular. “How can we continue cultivation?” asks Mukut.

According to official estimates, the country recorded about 55.73 lakh hectares of area coverage under sugarcane this season. In the corresponding period of last year, it was 55.22 lakh hectares, and thus, the coverage this time was 51,000 hectares more. The higher area was reported from Maharashtra (1.20 lakh hectares) and Karnataka (64,000 hectares), among others. In contrast, it was less in 10 states, including Andhra Pradesh (37,000 hectares) and Uttar Pradesh (35,000 hectares).

The cane-crushing season generally starts in October-November and continues till mid-April. However, in the 2021-22 season, the process continued well into May due to the record production of sugarcane. Between October 2021 and September 2022, more than 5,000 Lakh Metric Tons (LMT) of sugarcane were produced in the country. Of this, about 3,574 LMT of sugarcane was crushed by sugar mills to produce about 394 LMT of sugar (Sucrose). Out of this, 35 LMT of sugar was diverted to ethanol production, and 359 LMT of sugar was produced by the sugar mills. Incidentally, with this, India has emerged as the world’s largest producer and consumer of sugar and the second-largest exporter of sugar.

Crushing of sugarcane to extract juice | Photo courtesy: Special arrangement

When the government figures were quoted, Shetti pointed out that the country could do better with a streamlined weighing process. “We demand that weight measurement should be transparent and shared online. There are about 200 sugar mills in Maharashtra, and all should share the process online,” he added. He proposed a system akin to the Outdoor Payment Terminal (OPT) that provides control over any fuel dispenser at a petrol station.

Several attempts to seek an official view from the Indian Sugar Mills Association (ISMA) did not elicit a response. However, a senior functionary of one of the state bodies denied such allegations. “After sugarcane is harvested and left in the open, the sugar content starts drying. This is like 0.5 per cent for 24 hours. Look at it this way, if there is a loss of five to six per cent (in weight for farmers), it (the unaccounted volume) will increase our cost of production. We can’t afford it as we’re already working on thin lines,” he claims. He contends that “sugar-making is a loss-making proposition, and I’m surviving because of ethanol and other by-products”.

Lately, the growth of ethanol in biofuel has supported the mills with faster payments due to reduced working capital requirements, less blockage of funds and lesser surplus sugar with mills. During 2021-22, the revenue of about Rs.18,000 crores was made by sugar mills and distilleries from the sale of ethanol. In the new season, the diversion of sugar to ethanol is expected to increase from 35 LMT to 50 LMT, and this would generate revenues for sugar mills amounting to about Rs. 25,000 crores.

The Union Government does not set up sugar factories in any part of the country, and currently, no such proposal is under consideration. According to a statement of Sadhvi Niranjan Jyoti, Minister of State, Ministry of Rural Development and Consumer Affairs, Food & Public Distribution in Lok Sabha, “financial conditions of sugar mills have improved and more than 99 per cent of cane dues up to sugar seasons 2020-21 and 97.40 per cent of cane dues for sugar season 2021-22 have been cleared”. However, sugarcane farmers across states complain that they are not part of this growth story and will continue to face losses until the government addresses cultivators' concerns and curbs mill malpractices by owners. 

Jayanta Bhattacharya is a journalist with over three decades of experience with many national and international media organisations. He writes on politics, conflict and agriculture. He has extensively covered Afghanistan and many Southeast Asian countries.