The recent weeks have seen a rebellion of sorts on sugarcane prices. But is a minimum support price (MSP) on the lines of wheat and rice — advocated by Prime Minister Atal Bihari Vajpayee — a solution to the festering problem? Maybe, as a short-term fix to quell the rebellion among agitating farmers in western Uttar Pradesh. But the problem will not go away and will return with a vengeance the next sugarcane cycle. As a long-term solution, however, it goes against the spirit of reform which is blowing through the sugar industry as well. How can decontrol take place as long as mill owners have to pay state-advised prices for cane supplies? Emotions, naturally, were running high in the Lok Sabha after the police firing on sugarcane farmers in UP’s Basti district on Wednesday. Farmer organisations even resorted to burning sugarcane fields in that state demanding higher prices for their supplies. The political temptation, naturally, is to give in and recommend higher prices. That indeed is the root of the problem. Political oneupmanship ahead of any assembly elections — especially in constituencies where cane farmers are important like western UP — has always been the problem. It is not that the Centre does not provide price support to the sugarcane farmer. The central government announces a statutory minimum price (SMP) for sugarcane each season, but these are not binding except for calculation of the price of levy sugar. Populist state governments, with an eye to the farmer votebank, recommend in turn higher state-advised prices for cane supplies. Does Vajpayee want an all-party consensus to scrap the latter and go for a single MSP? The wheat and rice analogy doesn’t hold beyond a point as the government procures the marketable surpluses. Will the government similarly stand ready to procure cane supplies at the MSP? Doesn’t make sense at all, except as a short-term fix. At a time when mountains of foodgrains amidst starvation deaths is forcing a re-look at the entire question of support prices, adding sugarcane to the MSP list is no durable solution to the farmers’ agitation. In the spirit of reform, the need indeed is to scrap such price supports — which go only to the rich farmers in any case — and let market forces operate. This means letting farmers and mill owners sit across the table and thrash out an acceptable price. Although there is an inherent conflict between farmers and industry, this is an area where there is considerable scope for cooperation and partnership. Farmers who supply cane to a particular mill can surely benefit from scientific cultivation practices, more judicious use of fertilisers and pesticides and the assurance of a long-term relationship. But if his interest is only to secure the highest possible price for his crop — conceded by politicians — these demands will keep erupting every now and then. The basic point is that MSPs are only a politically expedient short-term fix.
