Vidarbha in Flames

A local legislator attempted suicide in the legislative assembly, frustrated by all other methods to alert the state to the farmers suicides

DIONNE BUNSHA
In Vidarbha, Maharashtra

It was time for a reality check. In the safe confines of the legislative assembly, Maharashtra’s politicians witnessed a dose of the real world last week. Gulabrao Gavande, a Shiv Sena legislator, wanted them to wake up to the daily tragedy of the Vidarbha countryside. So, he rushed to the floor of the assembly and poured a bottle of kerosene on himself. Then, he opened a bottle of pesticide and was about to swallow it when other legislators rushed to stop him. Gavande was banned from attending the rest of the session.

His recklessness could have set the entire house on fire - literally. But his shocking suicide attempt ignited a fiery debate about the government’s neglect of the agricultural crisis in the underdeveloped Vidarbha region of eastern Maharashtra. Farmers’ suicides are on the rise. Everyday, a few more deaths are reported in local newspapers. But so far the state has not addressed this alarming tragedy. A defensive chief minister promised to announce a ‘package’ for Vidarbha’s farmers, but was not willing to say anything more. The opposition too has no creative solutions to offer. Shiv Sena leader Uddhav Thackeray rushed to Vidarbha and assured farmers his party’s muscle power to bash up moneylenders and bank officials who harass them.

Meanwhile, in his hospital bed, a visibly shaken Gavande told Frontline, “I don’t know what I was thinking when I did this. I’m very troubled seeing so many people kill themselves. Morchas and protests have had no effect on the government. I wanted to awaken the administration to this crisis.”

Gavande, a local MLA from Akola (and also a wrestler), has been brawling with powerful moneylenders who have been snatching land from farmers. “Moneylenders are taking advantage of people’s desperation. They won’t lend until the farmer signs a document handing over land ownership to them. Then, when the farmer can’t repay they take possession of the land. So farmers land worth Rs two lakh for a Rs 20,000 loan. Moneylenders have captured around 5000 acres of land in this way,” explains Gavande.

A son of the soil, Gavande uses the methods he knows best. “Only I have the strength to fight these thugs because I am a wrestler and have an akhada with me,” he smiles. “I told the villagers not to spare anyone who harasses them. Recently, when a moneylender told one farmer to sell his daughter but pay back the loan, the villagers of Dadham got together and flogged him to death.” In the last few months, the government has cracked down on moneylenders, arresting several of them. But that has also led to more distress since they are the only source of funds available to farmers. Since most of them have defaulted on bank loans, that option is not open to them anymore.

Mounting debts are just a symptom of the crisis in agriculture. The crux of the problem is profitability, not only for the cotton crop, but also for others like oranges, soya, wheat, jowar, chillies or paddy. “The prices of all products have risen dramatically over the years. Our input costs have also shot up. But for the last 10 years, the price we get for our crop has remained the same,” says Jitendra Tatte, a large cotton and orange farmer from Lehegaon in Amravati. Input costs for his 60-acre farm have drowned him in debt. The more he cultivates the more his losses. “Everyone is in the same distress. Some have committed suicide. The rest of us live in agony.”

At a cotton farmPhoto: Dionne Bunsha
Tatte rattles off several statistics to prove his point. “In the last ten years, the price of soya oil has increased from Rs 25 per litre to Rs 45. But have been selling soyabean at the same price of Rs 900 per quintal since then. How do you expect us to survive?” he asks. “Why doesn’t inflation apply to our produce? Why do farmers have to starve so that the rest of the country gets cheap food?”

This season, the Maharashtra government has accentuated their dilemma further by reducing the price at which it will procure cotton from approx. Rs 2,200 per quintal to Rs 1,700. The cost of cotton cultivation is Rs 2,200 per quintal, not including the farmer’s own labour and other expenses like bank interest. If the price falls, farmers will suffer major losses of Rs 500 per quintal, no matter how much they produce. This will lead to more distress and more suicides.

At a public meeting in Nagpur recently, deputy chief minister R.R. Patil justified this price fall by arguing, “Last year, the state suffered Rs 1,800 crore losses due to the procurement scheme. Yet, suicides were the highest. This means the money is not going to farmers, but to agents. We will find other ways to make sure the funds reach those who need it.”

“Reducing the price is not going to solve the glitches in the procurement system,” says Vijay Javandhia, farmers activist. “If the government is really interested in making the scheme work for farmers, they should pay the amount up front to farmers, not in installments, that too over a period of one year. And, they should stop deducting loan collections from the payments. Leave it to the banks to recover their loans.”

The procurement scheme is in the red because the international prices of cotton have fallen. Cultivators in western countries receive huge subsidies from their government. They can afford to sell their produce at much lower prices. The Indian government could protect its producers from imports and crashing international prices by hiking the import duty on cotton. At present, it is only 10 per cent, import duty on other products like sugar (60%), rice (80%) and second hand cars (180%) are much higher. “The government is willing to protect sugar farmers and foreign car manufacturers here but not cotton farmers,” says Javandhia.

Maharashtra’s 30 lakh cotton farmers are being told to innovate and diversify. But innovations only increase the burden of debt. And interest is high. Banks charge 12%. But interest for consumer loans are only 7% and a mere 4% to start a sugar factory. Moneylenders, now the main source of credit, charge between 60% to 120%. And, you risk losing your land.

Farm improvements cost Sudhir Tatte his life. He spent more than two lakhs rupees sinking tube wells and installing sprinklers and drip irrigation on his orange orchards and cotton fields in Lehegaon. But nothing seemed to work. The water table had fallen. Finally, he swallowed poison and killed himself in 1998. Seven years later, his family is still burdened by debt. They have given up on agriculture and leased out the fields to others.

Bt cotton is also being promoted as the solution. It costs around 12 times more than other seeds, and has failed to deliver results. “The dealer assured me that I would get 19 quintals per acre from Bt cotton. Not only were the seeds expensive but I also had to spray pesticide. Yet, I got the usual two or three quintals, but I spent so much more. I’m totally ruined,” said Surendra Zane, a farmer in Lehegaon.

“What other crops can we grow?” asks Jitendra Tatte. “The prices of all crops have remained stagnant. We have even experimented with growing herbs, but there is no market to sell them. Moreover, our choice is restricted to only a few crops since we don’t have irrigation.” Only 10 per cent of Vidarbha’s farmland has irrigation. It is difficult to even promote dairy farming as an alternative since it is too dry to grow fodder for livestock.

The chief minister is expected to announce the usual stop gap measures – loan or interest waivers, free power, compensation for families of suicide victims. But these are just band aids. The real issue of pricing and profitability has to be tackled to stop peasants from sliding down further. “Mine will be the last generation of farmers. I don’t want my son to be a farmer and suffer the way I have,” says Jitendra Tatte.

As Vijay Javandhia puts it, “In my next life, I would rather be a cow in Europe than a farmer in India. There, they get two dollars subsidy per day to feed their cattle. Here, our farmers slog in the fields and don’t even get one dollar.”

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A Fate Worse Than Death

It seemed like a normal meagre meal for Dharmi Rathod when suddenly her husband Ramesh started vomiting. He had barely eaten anything. He was choking on the pesticide he swallowed. His friends rushed him to hospital, but he died there on 10th November 2005. Dharmi was left stunned… and without a single paisa with her.

Her village Bongavan in Yavatmal collected money for his funeral. They helped her with food and money. One month later, Dharmi is still reeling from the shock. “I have no idea how much he owed and how many loans he had taken. All I know is that the day before he died, bank officials had come to our hut.” For the last month, the trauma has taken its toll on Dharmi. She is constantly ill and has visited the hospital thrice.Dharmi Rathod with her childrenPhoto: Dionne Bunsha
How does Dharmi manage to look after herself and her two children? “My son works as a farm hand every weekend. From that money, we go to the market,” she says. Even when Ramesh was alive, Dharmi and Ramesh both worked as farm labour earning Rs 20 and Rs 40 per day respectively. They could not survive only by tilling their four acre farm. This season, it will yield less than a quintal of cotton. And, Dharmi doesn’t know the first thing about managing a farm. Unable to cope, she has called her relatives to help her sort out her life.

Ramesh seems to have left Dharmi with a fate worse than death.

Frontline, Dec. 17 - 30, 2005 Also available here

Frog Weddings and Farmers’ Funerals

Bad rains, family problems, alcoholism, gambling – the government continues to find different reasons for the farmers’ suicides rather than address the crisis. Everyday, a few farmers kill themselves in Vidarbha, western Maharashtra. The globalisation of penury intensifies.

DIONNE BUNSHA
in Yavatmal, Maharashtra

Just before the monsoons, farmers in Vidarbha arrange frog weddings to welcome the rain Gods. Villagers make one male and one female frog pose in separate earthen pots for their baraat. The procession finds its way to the local temple where they are married. After the wedding, the married couple is given a send off a local water source and let loose. If they croak, it means that they have been told that the monsoon is near. (Locals believe that frogs are harbingers of rain)

This year, the frog weddings have been followed by several funerals. Not of frogs, but of farmers.

The Vidarbha region of north-eastern Maharashtra has seen a spate of suicides in the last month. It is close to the Andhra Pradesh border, another state where mass suicides have been reported. Many farmers disappointed by the poor rainfall and with many burdens to fulfill have cracked under pressure and killed themselves. Around 45 suicides have been reported since June but the chief minister’s office has awarded compensation to only 8 so far. Almost everyday, a few more farmers commit suicide.

Atmaram Shinde (55) from Pada village in Yavatmal hoped that this monsoon would help him wipe away his accumulated debts. He sowed his field on time. But the seeds dried up - there was no rain. He planted a second round of seeds. But the monsoon did not arrive. The Rs 22,000 he borrowed to spend on seeds and fertiliser went down the drain. On June 26th, Atmaram killed himself by swallowing the deadly pesticide, endosulphan.

“He was very disturbed. For the last two years, the crop had failed. Loans had piled up. We have to get our daughters married,” said his wife, Nirmala. She hasn’t lost hope. She recently borrowed another Rs 4,000 from a local moneylender to sow the field for the third time. But the rains haven’t yet arrived.

Jitru Kannake's family at 13th day ceremony after his death. He committed suicide on July 4Photo: Dionne Bunsha
Chief minister Sushilkumar Shinde visited Vidarbha. Damage control just before the Prime minister’s visit, which he later cancelled. Shinde said that farmers should have no problem getting loans since the government has ordered banks to convert short term loans to long term loans. The CM also instructed district administrations to prepare for the drought situation by starting employment works and providing for drinking water and food grains supply. However, there has been no mention of compensation for crop loss.

But compensation is not a permanent solution. Mass suicides associated with the agricultural crisis have been reported in Vidarbha since 1996. This cotton belt is close to the Andhra Pradesh border, another state where serial suicides have been reported. In 1987, more than 80 suicides occurred. There were 90 suicides reported in 2001. The underlying causes that have led to such distress need to be tackled.

Agriculture is no longer viable for most cotton farmers here. “Whatever we get at the end of the crop goes into re-paying the loans. Yet, every year, we continue to sow the fields, hoping that it will be better. What else can we do? This is the only work we know,” said Namdeo Maraskoche, a farmer from Pada village. Last year, after paying off some old debts, he was left with Rs. 7,000. Hardly enough to sustain his family. They work on other’s fields and earn a daily wage to survive. (The rates for agricultural wages are Rs.40 for men and Rs.25-30 for women, far below the government minimum wage of Rs.90 and Rs.70 respectively.)

After economic liberalisation policies were introduced, agriculture has become unprofitable. The cost of inputs - seeds, fertilisers, pesticides - have risen dramatically. Market prices for farmers’ produce have not kept pace. Even with a good crop, they barely break even. A bad crop could spell disaster.

This vulnerability is heightened due to the absence of sufficient rural credit. Bank interest rates for farmers are around 14%, much higher than urban consumers who pay 4% for car and home loans. Crop loans sanctioned by banks cover barely 70 % of the input costs, say district officials. Farmers claim that bank credit provide for only 15% of their needs. They rely on moneylenders-traders for the rest, who charge interest rates varying between 30% to 120% per year. That’s enough to kill any hope of a surplus.

Vidarbha’s farmers mainly grow cotton, soybean and jowar during the kharif (monsoon) season. Most agriculture here is totally dependent on the monsoon. Only 15% of Maharashtra's gross cropped area is irrigated, as against the national average of 32.9% in 1989-90. Amravati division's share of gross cropped area under irrigation was a meagre 9%, says the divisional commissioner N. Arumugam. Government expenditure on rural infrastructure has also shrunk. Vidarbha has several irrigation projects, which haven’t yet got off the ground. Funds allocated for development of the region haven’t been utilized, says opposition leader Nitin Gadkari.

Yields in Maharashtra, especially for cotton, are low. Farmers keep experimenting with costly new varieties of hybrid seeds in the hope of getting a better crop. Pests have become resistant to pesticide, so farmers keep increasing the doses of deadly pesticides like DDT and endosulphan, which are banned in other countries. The unregulated commercialization of agriculture has resulted in further losses for small farmers.

Maharashtra’s agriculture minister Govindrao Adik denies that the suicides have any connection with government policy. “What can the government do if the rains fail?” he asked. “The suicides occur because of different reasons- some victims were very poor, others had drinking problems, some may have been gambling. What can we do? Are we responsible? In the past also there have been suicides. Why is the media highlighting them now?”

Considered one of Maharashtra’s underdeveloped regions, Vidarbha has seen not only farmer’s suicides but also malnutrition deaths in its tribal areas. It has been a political battleground because the BJP-Shiv Sena has made inroads in this traditional Congress stronghold. In the recent Lok Sabha election, the Congress-Nationalist Congress Party alliance won only one of 11 seats.

A few local politicians have also demanded separate statehood for the region. They complain that it is neglected by a state government, which doles out more to western Maharashtra, the domain of politically connected sugar barons. With the state elections in the next few months, the Congress-NDA alliance government has woken up to the suicides.

But how much will that help Jitru Kannake’s family? A farmer from Vadavna Bazar village, Jitru killed himself on 4th July. He sowed his nine-acre farm three times hoping for rain. His debts kept mounting. The recent sowing cost him Rs 29,000. He had other outstanding loans, including one of Rs 50,000 to get his children married in May.

“He had given last year’s entire crop to the moneylender. Still, there was Rs 20,000 more to pay him. Then, there were bank loans pending. And, he borrowed Rs 50,000 for the wedding. There seemed no hope of ever paying back,” said his son Ganesh. “Farmers never have their own money. We have to keep borrowing from somewhere.”

Here, weddings seem to be closely followed by funerals.

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Living with the Legacy of Loans

The minister came and went. But the bank loans remain.

Saraswati Ambarwar’s husband, Ramdas committed suicide in January 1997. After local activists highlighted the plight of indebted farmers in Vidarbha, the then revenue minister Narayan Rane visited the area. He met Saraswati and made several promises - the government would give her Rs one lakh compensation, a waiver of all Ramdas’ bank loans, it would pay for her daughters’ education for three years and for her farm expenses for three years.

The cheque was all she got. The bank loan has doubled from Rs. 25,000 to Rs 50,000 because interest has accumulated. Saraswati keeps getting default notices from the bank. They have also threatened to auction her house. But paying off the loan seems impossible. Saraswati barely has enough to survive..

“After getting so many default notices, I managed to collect Rs 9,000 and partly paid back the debt. That was three years back,” said Saraswati. But the rest of the loan has accrued interest over the years. “My husband owed Rs 40,000 to a moneylender in Adilabad, Andhra Pradesh, just 50 km away. When he came to collect his money, he realised I could not pay and cancelled the loan.”

Saraswati used the government cheque to pay for her eldest daughter’s wedding. One of her daughters slumped into a major depression after her father’s death. The other has been constantly ill. “Last year, I had to take Rs 40,000 from my brother-in-law Arun just to pay for her treatment,” she said.

When her husband died, he left a suicide note asking Arun to look after his family. Since then, Arun helps her to cultivate the 12 acres of land that Ramdas left behind. “Whatever we get from farming is not enough. Arun helps us out when we run short. It may be better if I sell the land,” said Saraswati.

Seven years after Ramdas’ death, the situation in Vidarbha’s countryside has not changed much. Even today, a couple of suicides are being reported everyday. There are several widows like Saraswati who are struggling with the legacy of loans that their husbands have left behind.

Frontline, July 31 to August 13, 2004 Also available here

Sugar Daddies

Sugarcane has fuelled the corruption of political power in some states of India – the world’s largest sugar producer. But, as Dionne Bunsha reveals, it’s the small farmers who pay the price.

Meet Balasaheb Shinde. He’s wondering how he will abandon his children. Balasaheb is
a small farmer of sugarcane in Beed, Maharashtra. He’s so deep in debt that this year he and his wife will have to migrate to find work as cane cutters. His youngest son will drop out of school and go with them. But his three older children can’t stop their education. He will have to leave them alone in the village.

‘There’s no-one to look after them. For the first time, I am leaving to work as a labourer, even though I have my own farm. It’s not profitable to grow sugarcane any longer,’ says Balasaheb. ‘The loans keep piling up. The moneylenders are demanding repayments. How will I manage?’

Meet Gopinath Munde. His party controls the Ambejogai sugar co-operative where Balasaheb is a member. The factory hasn’t paid outstanding dues to farmers or its workers. Munde is leader of the opposition in Maharashtra, India’s largest sugar-producing state. In the previous government he was Deputy Chief Minister. The factory is situated in his constituency. Its chairperson is an associate from his political party, the right-wing Bharatiya Janata Party (BJP). Munde recently set up several sugar factories nearby. His wife is the chairperson of one. He is chairperson of another. Politicians control most sugar-processing units in this state, and almost all of them are co-operatives.

Termed ‘the lazy man’s crop’ (because it is so easy to make money from), sugarcane farming was introduced in western Maharashtra by the pioneers of the co-operative movement during the 1950s. They were politicians who pumped huge amounts of government funds into co-operatives, developing roads and cornering a large chunk of the subsidies for irrigation. The region developed far ahead of the rest of the state.

A child joins family members cutting cane.Photo: Dionne Bunsha
Politicians like Munde now control not only sugar factories, but also other co-operatives within their constituencies – banks, dairies, irrigation and education institutions. Right from the sarpanch (local representative) at the village level to the Chief Minister, the entire political network is closely linked with sugar co-operatives.

Every link in the chain gets a piece of the pie. Sugar barons appoint their cronies or family members as chairpersons and directors. Often they manipulate government policy in their favour. The ‘loyal supporters’ lower down the line are awarded contracts and employment – patronage politics at its most efficient. For the members of the sugar co-operatives themselves barely a few scraps remain.

In the Ambejogai co-operative they suspect that Munde would like their factory shut down. It would mean more business for the co-operatives nearby which he runs. Munde controls the economy and politics of his constituency. He prospers while the members of the Ambejogai co-operative are on the verge of starvation.

To gain control over a co-operative means to establish a fiefdom, to capture a ‘vote bank’. Politicians from the ruling centrist alliance government control 99 per cent of Maharashtra’s sugar industry. The rival BJP is still trying to break into the syndicate.

Corruption
Today, the industry is in trouble – 56 of Maharashtra’s 163 sugar mills are bankrupt, ruined by corruption and nepotism. Second and third generation politicians have squeezed out all profits, leaving the state government to bail them out. The state government contributed a 30-per-cent redeemable stake in the equity of these co-operatives, but few have repaid the equity. It also stood guarantee for the 60-percent equity taken as loans, some of which haven’t been repaid either.

Last season 19 factories took loans to crush cane. They started production for a short while and then stopped. The aim never was to operate them – merely to take the money and run. They didn’t repay the bank or the few farmers whose cane was crushed.
Are the mills really broke, or have they been made so? ‘The management wants to show losses. Or else how will they make money?’ asks Ramgonda Patil, a small farmer in Kolhapur district. ‘They inflate expenses and siphon off funds. Then they keep borrowing from the banks to pay farmers. The money never reaches us. But we have to bear the burden of those loans. If run properly, the business is profitable.’

Farmers get a very small part of the revenue. Sugar sells at Rs12 ($0.26) per kilo on the domestic market and Rs10 ($0.21) internationally. But farmers get only Rs6.25 ($0.14) or less.

‘The co-operatives are run by those who have no stake in it at all. It should not be the side-business of politicians,’ says Madhav Godbole, a former bureaucrat who has suggested stopping government involvement in this sector.

But who’s listening? So far, a bankrupt state government has shelled out Rs65 million ($1.41 million) to pay off the co-operatives’ bad debts. There’s another Rs4,000 million ($86.96 million) in guarantees yet to be paid.
The long wait for bullock carts delivering to the Ambejogai sugar
millPhoto: Dionne Bunsha
Farmers have also felt the blow. ‘The co-operative is ours. But we have no say in the way it is run,’ says Ramgonda Patil. ‘Yes, we have elected the directors. But what choice do we have? They use money and muscle power during the elections.’ Any attempts to challenge their authority are nipped in the bud. ‘If anyone dares to ask a question at the cooperative meetings, he is taken out by their thugs. The directors of the factory run their own goonda raj (gangster rule) here.’

Cane growers are being squeezed from both ends. Sugarcane prices offered by factories have fallen by around 25 per cent in the past five years. Around a third of factories haven’t even paid farmers the Indian Government’s minimum price of Rs695 ($15.1) per tonne. In the season that started in October, industry experts estimate that only five per cent of the factories will be able to pay farmers the minimum price. And even this minimum price is not sufficient to meet farmers’ expenses.

Production costs have risen by around two-thirds in the last five years. There have been huge hikes in power, irrigation and other charges due to economic liberalization. ‘Every year our debts rise by another Rs10-15,000 ($217- 326). Cane prices are not enough to recover our costs. Many factories don’t pay in time. So interest on our bank loans also keeps piling up,’ says Ramgonda. At the end of the 18-month crop, a farmer’s net income is approximately Rs5,000 ($109) per acre – that’s just Rs278 ($6) a month.

Drowning in debt, many small farmers have had to sell part of their land. The moneylenders are raking it in. They charge farmers interest at rates anywhere between 35 and 60 per cent. If the farmer can’t pay, they just take over the land. Earlier, when government and co-operative banks came here, moneylenders lost their hold over small peasants. Now they are back with a vengeance.

Why not shift to another crop? Many have switched to soya beans. But prices of soya too have crashed by a half in the last year. ‘What else can we grow? We have to grow cash crops to get money to pay things like medical bills, school fees. It’s also easier to get a bank loan if you grow sugarcane. Until now it was considered a stable crop,’ says Ramgonda. But this season a huge pest attack has destroyed half the crop. Farmers’ incomes are even more fragile.

Neglect

Peasants in other parts of Maharashtra still protest about being the neglected stepchildren. Their complaints are not unjustified. For example, although sugarcane is grown on only four per cent of Maharashtra’s total cropped area, 60 per cent of irrigated water goes to this crop alone. Bank credit, dairies and other facilities are far more accessible here than in the rest of rural Maharashtra.

It’s from these neglected areas in central Maharashtra that workers migrate to the lush sugarcane belt during the six month harvesting season. Contractors hired by the factory bring them in groups. Some factories haven’t paid contractors’ bills, so these migrants haven’t got their full wages either. Their exploitation is double-edged – both by the factories and by the contractors.
migrant labourers camp out in the plantationsPhoto: Dionne Bunsha
Many, like Shivaji, barely get a few hours’ sleep during the cutting season. Yet, after labouring round the clock, Shivaji may not be able to work off the advance he took from the contractor. Before leaving their village in Beed, around 200 kilometres away from the factory, the contractor gave his family Rs20,000 ($435). This is offset against the amount of sugarcane they cut. Like most migrants, Shivaji may return to his village with a debt to repay. ‘If, at the end of the season, we haven’t cut enough cane to offset the advance given to us, we have to pay back the rest. The interest rate is 60 per cent per year,’ he says.

Trapped in a cycle of loans, workers keep coming back to the sugar factories every year. The need for a lump-sum advance for consumption, to marry their children or pay medical bills, makes workers approach the contractor. Families repay the advances by cutting between one to two tonnes of cane per day, at the rate of Rs100-115 ($2.5) per tonne for bullock-cart owners and Rs65 ($1.41) for tractor workers. Often workers are given less, as their unpaid loans are offset against this advance.

In fact Uttam Siserao, a landless labourer from Parbhani, worked for free in the 2001-02 season. He explained: ‘My wife was ill last year and could not work. We had taken Rs10,000 ($217) from the contractor. I worked off Rs5,000 ($107) and the other half was due. After that, she passed away. This year I am repaying her advance.’
Most workers use up their advances in the village itself and buy their daily rations by selling the sugarcane leaves as fodder. They leave with nothing and return home still empty-handed.

Ironically, while millions of sugarcane farmers and workers are starving, the warehouses are overflowing with sugar. Overproduction has resulted in swelling stocks. Factories are desperate to sell them off. To offload stocks, the Government has offered an export subsidy – paying producers to get rid of their sugar. But no-one seems bothered whether the farmers or workers will get a share of the profits.

Shetgonda Patil, a farmer from Kolhapur district, puts it eloquently: ‘We have shares in the factory. We grow the cane. But we don’t get to taste any sugar – not even a pinch.’

New Internationalist December 2003 Available here

The Hutatma Model

Corruption, mismanagement, political fiefdoms – these are the words usually associated with sugar co-operatives in Maharashtra. Here’s one that’s different.

Dionne Bunsha
In Walva, Maharashtra.

It’s Sunday afternoon. Most people are enjoying their siesta. But, inside the Hutatma Kisan Ahir sugar factory, farmers from 15 villages have travelled here to talk business. There’s lively discussion and debate. The weekly meeting of the sugar co-operative’s Board of Directors is underway. Sugarcane farmers themselves manage India’s most efficient sugar factory in Walva, Sangli district. Who says you need a fancy MBA to run a successful company? You don’t even have to pass high school.

The Hutatma Kisan Ahir Sugar co-operative is different from other sugar co-operatives in Maharashtra. No politician controls its functioning. Farmers take all the decisions collectively. The co-operative’s founder, Naganath Nayakawadi, a freedom fighter and social activist, guides the co-operative’s progress.

Each of the 15 villages, where the co-operative’s members live, collectively selects a director to represent them. Moreover, one Dalit, two women and one poor candidate also have to be appointed directors. All members decide together on major issues like cane prices, purchases etc. Weekly board meetings have an open door policy. Any member can attend and vote. “In all other sugar factories, the management takes decisions behind closed doors. Only here, the system is transparent. Even you can walk in and question us,” says Hindurao Patil, a small farmer and former director of the co-operative.

The ‘Hutatma model’ has reaped rich dividends. For the past 18 years, the factory has received national awards for being the most technically efficient mill. Its recovery rate (amount of sugar recovered from the cane) is the highest in India. The co-operative pays farmers the highest price for cane in Maharashtra. And, payments are prompt.

The weekly meeting of the Board of Directors of the Hutatma Kisar Ahir Sugar Cooperative at the factoryPhoto: Dionne Bunsha
The co-operative makes sure that its prosperity trickles down to the poorest. Each village has a job quota. Members decide who should get factory jobs. At village meetings, people identify the poorest families for employment. More than one-third of factory workers are Dalits. To employ those most in need of work, the factory announced a job scheme for the poorest. “Those who agree to work as cane cutters for two years are given permanent employment after that. Only the poorest are willing to cut cane. That’s how we identified the most needy families,” said Shahaji Bansode, a factory worker. More than 100 people got jobs under this scheme. Factory workers are given free housing, a large bonus and quarter of the surplus generated.

Even migrant sugarcane cutters, who work here during the six-month cane-crushing season, get a 25% share of the surplus. These workers travel from the drought-prone Marathwada region in central Maharashtra to work in sugar fields in the western part of the state. The Hutatma co-operative is the only one to have built houses for cane cutters and a school for their children. Labourers also get free medical treatment.

Yet, the co-operative has money to spare for rural development. Part of its surplus goes towards funding an educational trust, which runs balwadis (pre-primary schools), a high school, a college and a girls hostel. The education and hostel is free. “It’s run so that even the poorest get the opportunity to be educated,” said a director. Many villages have paved roads thanks to the co-operative’s investment in rural infrastructure. Co-operative dairies and banks have also sprouted in the area. The factory is also funding lift irrigation schemes for farmers in the area.

The co-operative doesn’t stop at only looking after its own. It also supports social causes. After the Latur earthquake, the co-operative adopted 108 destitute children and educated them in its school. A part of the surplus is given every year to those displaced by the nearby Warna, Urmodi and Koyna dams. Nayakawadi, popularly known as ‘Annasaheb’, has made sure that the co-operative retains its social conscience. “This factory is named after one of our comrades who was killed by the police in the Quit India movement. Our work today is a continuation of people’s struggle for their rights. The movement started in 1942 when we ran a parallel government against the British Raj. One person can’t do anything. People have to work together,” he says.
Naganath Nayakawadi, the freedom fighter who founded the sugar cooperativePhoto: Dionne Bunsha
Women hold top posts in the present Board of Directors. Nayakawadi ensured that women were appointed chairperson and vice-chairperson. They are daughters and wives of Anna’s old friends. What power they actually have remains under doubt. Finally, whatever Nayakawadi advises is law. He enjoys enormous respect, and lords over a socialist fiefdom of sorts. “They are new, but they will learn,” he says about the women chairpersons. “It is very important to set such examples for others. And, it also boosts women’s self-esteem.” In the past, the co-operative has had a Dalit, Jain and even Muslim chairperson. Each gets their turn. No one can hold a post for more than one five-year term. The board changes completely every five years.

Directors are mainly medium or large farmers. Few small farmers actually get chosen. “Poor people can’t spare the time to go for meetings. We are too busy just working for our survival everyday. Maybe if they gave directors a salary, it would be possible,” said a marginal farmer. “But the directors we elect make sure that everyone benefits from the co-operative.”

Haven’t political parties tried to gain control over this co-operative? “They know there is no scope for corruption here. So they leave us alone. They don’t get involved. They loot their own factories,” said Yashwant Babar, a former director of the Hutatma co-op. “All of us support different political parties. But when we come for a meeting, we leave our politics outside the door. It should not interfere with issues of our livelihood.” Sound logic that has built a strong business.

The Hutatma model may baffle management gurus who believe that only men in suits are qualified to manage corporations. The co-operative’s 8,000 members have crafted a different brand of business. They know what’s best for them. Their final aim is prosperity, not profit.

Frontline, September 13 - 26, 2003 Also available here

Machines that Mow down Migrants

The arrival of imported cane-harvesting machines in sugarcane fields may push migrant cane cutters deeper in bondage.

DIONNE BUNSHA

“This town rips the bones from your back
Its a death trap, its a suicide rap
We gotta get out while we’re young
‘Cause tramps like us, baby, we were born to run.”
-- Bruce Springsteen, Born to Run.


Bleary-eyed, Shivaji Randale wakes up in the biting cold at 3 a.m. and makes his way to the sugarcane fields in Baramati along with his toli (group of around 10 workers). He has been able to snatch only two hours of sleep. But sleep doesn’t matter when there’s a loan to be worked off.

By afternoon, he loads his bullock cart with the cane his family has cut, and leaves for the crushing factory. There, he waits in queue until late at night, or even the next day. Yet, after labouring round the clock, Shivaji may not be able to work off the advance he has taken from the contractor. Before leaving their village in Beed district, around 200 km away, his family was given Rs 20,000 by the contractor, which is offset against the amount of sugarcane they cut. Like most migrant workers who travel to western Maharashtra’s sugarcane belt for work from the dry Marathwada region, Shivaji may return to his village with a debt to repay. “If, at the end of the season, we haven’t cut enough cane to offset the advance given to us, we have to pay back the rest. The rate of interest on this loan is 60 per cent per year,” he says.

Recently, the sugar mills have made it even more difficult for migrant workers like Shivaji to shake off their bondage. Ever since the sugar co-operatives imported cane-harvesting machines last year, not only have the number of workers reduced but their working days have also dwindled. “This season, we’ve got work for only 20 days in the month. How are we supposed to pay back the contractor? We’ve travelled so far to work -- not to sit here, twiddling our thumbs,” says Shivaji, who cuts cane for the Shri Chattrapati factory in Sharad Pawar’s constituency, Baramati. This factory, along with Malegaon co-operative in the same region, is among the first to use the harvesting machines. Twelve co-operative factories have decided to purchase 25 cane-cutting machines so far.

A family harvesting cane at a field in Kolhapur.Photo: Dionne Bunsha
Sharad Pawar, who controls Maharashtra’s co-operative sugar factory syndicate, has shown a special interest in importing the machines from Germany and Australia, each costing around Rs 1.20 crores. He has even asked the central government to waive the 32 per cent import duty on the machines. Pawar and Maharashtra’s sugar barons, many of whom are Congress (I) and Nationalist Congress Party ministers, have built their fortunes on the labour of more than a million penniless migrant workers, who travel to their factories every harvesting season to cut cane. But now, the sugar lobby plans to replace these labourers with harvesting machines, each of which makes 300 to 400 workers unemployed. As the machines mow down the livelihoods of these migrants, they are also pushing them deeper into debt.

Workdays have reduced in the factories using harvesting machines. Also, workers transporting cane to the factory on bullock carts have to wait longer in queue, for upto 36 hours, as priority is given to the cane cut by the machine. When the machines were first introduced at the Shri Chattrapati factory in January 2001, some workers, frustrated with the long delay, spontaneously held an agitation into the factory. Many were arrested and work in the factory was disrupted.

This wasn’t the first time that labourers fought back. The powerful sugar magnates have effectively squelched many strikes demanding better pay and working conditions. Conditions of work haven’t improved for decades. Every year, after celebrating Divali, the festival of prosperity, groups of workers, leave their villages knowing they will never find it. The migrants, with their cattle and meagre belongings, are herded into trucks and taken from the arid Marathwada region to the lush sugarcane belt of western Maharashtra. In the north, workers from Nandurbar and Dhule travel to Gujarat’s sugar factories. Similarly, many workers from Karnataka cross the border into Kolhapur’s sugar fields to work.
Migrant sugarcane cutters at one of their makeshift huts.Photo: Dionne Bunsha
Entire villages are transported – including barbers, shopkeepers and cobblers. Only the elderly and a few children, whose parents prefer to keep them at school, are left behind. But the education of most children is disrupted. “Which school is going to take them? They spend six months here and the rest in the village. Even our children don’t have a way out of this kind of work,” says Sultana Hanif from Parbhani, whose three daughters are with her. There are only 30 schools for migrant children in the state’s 198 sugar factories.

The workers are of two types - bullock cart and tractor workers. While bullock cart workers cut the cane as well as transport it to the factory on their carts, the tractor workers move from village to village harvesting the cane and loading it on the tractors. For both categories, working hours blur from one day to the next. Bullock cart workers wait till dawn outside the factory in the most miserable conditions. “Just look at the state of this yard. We have to sit in the middle of this cow dung all night. They don’t even clean the place or provide basic facilities like water, a shed or even proper pathways for the bullocks,” says Ganpati Shankar Kumbar, a worker from Karnataka who has crossed the border to Kagal in Kolhapur. Tractor workers are hauled up at any time in the night to load the tractor with cane. Bonfires are the only source of light and warmth as they work at odd hours in the night.

For these vagabond workers, there’s barely any shelter. Those with bullocks build straw huts on the outskirts of villages, with no electricity or sanitation facilities. Tractor workers pitch tents, which they shift every two or three weeks, as they move to another village for work. Some have no place to live. Like Ganpati Kumbar, who snatches a nap under his bullock cart, while waiting in queue. “What hut? This is my home,” he says, pointing to his cart.
The harvester at work in a sugarcane field in BaramatiPhoto: Dionne Bunsha
What makes them leave their homes to endure these harsh working conditions? Why do they come here, uprooting their families and disrupting their children’s education? “There’s no water in our fields. If the government irrigated our land, we wouldn’t have to come here,” says Janabai Marade from Beed, whose family owns 12 acres of land. “During a good monsoon can we grow some jowar or groundnut. After that, there is nothing. Barely a few days of agricultural work, which pays a pittance of Rs 20 per day for women,” she says. The agricultural crisis in the countryside has made agriculture unviable for several farmers like her. Agricultural growth (in terms of production and income) decelerated in the ‘90s. Investment in rural infrastructure like irrigation has dropped. The removal of subsidies has increased input prices, while produce prices have fallen after liberalisation. Farmers’ profitability has taken a tumble, sharpening indebtedness.

Trapped in a cycle of loans, workers keep coming back to the sugar factories every year. The need of a lumpsum advance for consumption, to marry their children or pay medical bills, makes workers approach the contractor. Families repay the advances by cutting between one to two tonnes of cane per day, at the rate of around Rs 100-115 per tonne for bullock cart owners and Rs 65 per tonne for tractor workers. Bullock cart workers are paid advances between Rs 15,000 to Rs 25,000 per family, while tractor workers’ families are given Rs 10,000 to Rs 15,000. Often, workers are given less, as their unpaid loans are offset against this advance.

In fact, Uttam Siserao, a landless labourer from Parbhani, is working for free this season. While waiting for work in a shed outside the Dutta sugar cooperative factory in Kolhapur for three days, he explains, “My wife was ill last year, and could not work. We had taken Rs 10,000 from the contractor. I worked off Rs 5,000 and the other half was due. After that, she passed away. This year, I am repaying her advance.” Most workers use up their advances in the village itself, and buy their daily rations by selling the sugarcane leaves as fodder for Rs 20-25. “We leave with nothing and also return home empty-handed. The advance we took was used up before we got here. When we return to the village, its back to borrowing and agricultural work,” says Sarubai Auchar who has migrated from Parbhani to Kolhapur.

It’s not surprising that these migrants work under the most insecure conditions with minimal legal protection. Their employers also run the government. Moreover, since workers are scattered in different places, they aren’t a strong vote bank. “Sugar is the most organised industry, but this sector has the most unorganised workers,” says Kumar Shiralkar, leader of the Sugarcane Transporters and Workers Union.

Although the factory pays their advances through the contractor, it refuses to acknowledge them as workers. “They should be given the same benefits and status as those working inside the sugar factory,” says Shiralkar. No labour laws are implemented to protect their rights although some like the Minimum Wages Act, Contract Labour Act , Moneylending Act and Workmens Compensation Act are applicable.
Cane cutters at a farm loading a truckPhoto: Dionne Bunsha
Considering the distinct nature of their work, the union is demanding the setting up of a mathadi board where every worker can register and which will regulate their working conditions. However, the sugar syndicate is against this idea. “Since our factories work for only six months in a year, we would like to keep the relationship with workers contractual. Anyway, the whole labour issue will die in the course of time as harvesting machines come in. If all factories get the machines, will save us Rs 691 million every year - Rs 12 per tonne of cane,” says Prakash Naiknavare, managing director of the Maharashtra Co-op Sugar Factories Federation. At present, the wages are revised every three years by the sugar cartel.

Although India is the world’s largest producer of sugar and the industry is growing at 8.5 per cent every year, this booming industry does not even provide its workers with basic facilities or share the profits with the workers. Almost all Maharashtra’s 192 sugar co-operatives were the platform on which Congress ministers built their fiefdoms. The BJP is also trying to get in on the act by setting up private sugar factories.

Local farmers and economies in western Maharashtra benefited from the infrastructure development that accompanied the establishment of a factory. For instance, although sugarcane constitutes only three per cent of the area under cultivation in Maharashtra, it corners 60 per cent of the state’s irrigation. Districts in Marathwada, where the migrants come from, have irrigation cover as low as six per cent. On the whole Maharashtra’s has a low irrigation cover of 15 per cent, way below the national average of 38 per cent. But irrigation facilities for sugarcane are abundant . Patronage politics and vote banks developed in the sugarcane belt. But, the migrants aren’t a vote bank. So its convenient to keep them tied to the contractors for generations. “Politicians have risen by climbing on the backs of these bonded workers,” says Shiralkar.

Krishna Pawar, a worker who has migrated within Kolhapur district puts it eloquently, “We cut the cane, but we don’t get to taste any sugar, not even a pinch.”

Frontline, Feb 02 – 15, 2002 Also available here

Drowning Cotton’s Lifebuoy

The Maharashtra government has refused to pay the full cotton procurement price immediately. This has left farmers at the mercy of trader-moneylenders. In a region where farmers suicides are frequent, the state is withdrawing support, pushing farmers closer to the edge.

DIONNE BUNSHA
in Vidarbha, Maharashtra

This season, Nirmala Nehare was thrown to the wolves. Not only did the climate fail Nirmala, a cotton farmer in Wardha, but the state government has also let her down. She was compelled to sell her meagre crop at lower prices to trader-moneylenders because the state refuses to pay farmers the full amount immediately while procuring cotton. This has meant further losses for peasants like Nirmala, already on the brink of bankruptcy.

After insufficient rain and a vicious pest attack on her crop, Nirmala’s family got only eight quintals of cotton, a fourth of what they normally harvest from their seven acres. They decided to give it to the moneylender at a lower price - Rs 1,800 per quintal- instead of selling it to the cotton federation at Rs 2,175. “Our hands are tied. We had to sell it to the trader. The government would pay in four instalments. Right now, they give only Rs 1,400 per quintal, while the rest of the Rs 2,175 will be paid next August. We can’t wait. Interest keeps accumulating at Rs 1,000 every month for the Rs 10,000 we borrowed,” says Nirmala from Dhamangaon village in Wardha.

Although she couldn’t sell her crop to the Maharashtra Cotton Federation this year, Nirmala still feels that the Monopoly Cotton Procurement Scheme (MCPS) offers her some security. “Without it, we would be completely at the mercy of the middlemen. They would lower the prices even further. At least now, they cannot offer much less than the state’s guaranteed price,” she says.

At a procurement centre at WardhaPhoto: Dionne Bunsha
Maharashtra’s unique MCPS still seems to be serving its purpose -- to protect cotton farmers from being cheated by traders and to ensure them a fair price for their crop by eliminating middlemen. This despite the state’s failure to pay farmers properly this year due to financial problems. Started in 1972, the scheme had been making profits and distributing 75 per cent of this surplus to cotton farmers until 1995. Then, international cotton prices started crashing and the scheme has run into accumulated losses of Rs 2,795 crores. Interest on this liability is Rs 1.35 crore per day. This year, for the first time, the RBI delayed sanctioning the full amount of the Rs 1,700 crore loan required by the state cotton federation to procure this year’s harvest. So far, it has sanctioned only Rs 900 crore.

A broke Democratic Front government said it would pay only 80 per cent of the central government’s support price for cotton (which is approximately Rs 1,875 per quintal, but depends on the quality of cotton). The balance of the price guaranteed by the state (averaging Rs 2,175 per quintal) is to be paid in three instalments. The opposition was quick to take advantage. It created a ruckus for several days during the assembly session held last month in Nagpur, the heart of Maharashtra’s cotton-growing Vidarbha region. Allying with Shetkari Sanghatana leader Sharad Joshi, who led a rail roko agitation, the BJP demanded that farmers be paid the full support price and the balance of the state guaranteed price later. Ironically, at various points in time, both the free-market proponent Joshi and the trader-funded BJP have demanded the scrapping of the scheme. The Democratic Front government caved in and offered a meek 90 per cent, which Joshi easily relented to and withdrew his agitation.

Ever since it was introduced, a motley group of traders, bureaucrats, politicians and activists have been demanding the death of Maharashtra’s MCPS, the only one of its kind in the country. But 30 years later, the scheme is still surviving. While many would attribute that to ‘vote bank’ politics, the simple fact remains that the scheme is a major reason why Maharashtra’s 30 lakh cotton farmers have managed to stay afloat.
At a cotton procurement centre in Wardha. Lakshmanrao Chaudhury (pictured), a small cotton farmer of Waipad village, who works here as a security guard, has not been able to sell his own produce at the centre because he is already in debt to the moneylenderPhoto: Dionne Bunsha
With globalisation heightening the agricultural crisis in the country, farmers’ profitability has been severely eroded. Production costs have multiplied in the last decade due to cuts in input subsidies. Rural credit and infrastructure investment has shrunk. Bank loans account for only 11.7 per cent of agricultural credit, leaving cultivators at the mercy of moneylenders. Farmers have also been squeezed by the fall in market prices due to imports and price collapses in the international commodity markets. “If the procurement scheme was scrapped, we would all sink. The traders would have a monopoly, like they do for all other crops,” says Rajendra Lone from Jamta village in Wardha. “This year, many people have had to sell to traders because it has been a bad harvest and the government is not paying the full amount immediately. Also, some don’t want the government to deduct their bank loans from the payment. They need money in hand. Otherwise, how will they run their homes?” he says.

Cotton farmers, not only in Maharashtra but also in AP and Punjab, have been worst hit by the farm crisis. In 1997-98, a severe pest attack destroyed the crop in Vidarbha, leading to a spate of more than 80 suicides. Several thousands of suicides have been reported in AP and Punjab’s cotton belts as well. The suicides continue. A local newspaper reported 35 suicides in Vidarbha from April to November 2001. Even though many left suicide notes and died by swallowing pesticide or jumping into a well, the government still tries hard to cover up the cause of the deaths citing personal or psychological problems. “All of us - rich and poor farmers alike- are in poverty, facing the same hardships. It’s just that some choose to end their misery by taking poison. Even large landowners are trying to sell off their land. But there are no takers,” says Punjaram More from Mahakal village in Wardha.

Explaining his declining profitability, Rajendra Lone says production costs for his 15-acre plot were Rs 5,000 per acre. But banks provide only Rs 1,500 per acre as crop loans. The rest of the cost has to be met by borrowing from moneylenders at exorbitant rates of interest varying from 60 to 120 per cent per year. “How are we to manage? Costs keep rising, but the prices have fallen by half for most crops. At least cotton prices offered by the government have been steady over the last five years,” he says.
At the Wardha procurement centre, cotton being weighedPhoto: Dionne Bunsha
Although the scheme is the only assurance farmers have of a fair price, there are many who think it should be scrapped. Some arguments are purely financial -- to contain losses. “Maharashtra’s guaranteed price is Rs 425 above the central support price. Moreover, since international prices have fallen by half since 1995, we are now selling the procured cotton at around Rs 1,500 per quintal, a 25 per cent loss,” says Sunil Porwal, chairperson of the Maharashtra State Co-operative Cotton Growers’ Marketing Federation, the government agency that procures the cotton. He feels that losses would be minimised if the monopoly element of the scheme was withdrawn and the state’s guaranteed price was reduced to central support price levels.

However, proponents of the scheme like secretary of the Peasants and Workers Party, N.D. Patil, argues that the government cannot abandon its responsibility to farmers. “If the monopoly element was removed, the losses would increase. Traders would buy only the best quality cotton in the market, leaving the rest to the government, while the overheads of running the federation would continue. This is an indirect tactic to close down the scheme. Since no political party has the courage to do it outright, they will just make its implementation impossible,” he says. The scheme is the only form of social security for the state’s cotton farmers who produce 20 per cent of India’s cotton, Patil asserts. “Around 97 per cent of cotton in the state is dryland cotton. Totally dependent on nature, cultivation is a gamble for them. This is their only protection,” he says.

Free market advocates like Sharad Joshi of the Shetkari Sanghatana have been demanding the removal of the scheme since he “opposes any restrictions on the trade of agricultural commodities”. Mr Joshi believes, “The scheme has been unable to secure for Maharashtra’s farmers prices that compare favourably with those obtained in the free markets in neighbouring AP, MP and Gujarat.” However, Mr Porwal points out that since Maharashtra’s guaranteed price is much higher than those in other states, many traders cross state borders to sell cotton in Maharashtra. Explaining the change in his stand during his protests last month, Joshi says, “It was against the opportunist abandonment of the scheme in times of recession.”

The problem is not with the scheme but with India’s trade and agriculture policy, says Kisan Sanghatana leader Vijay Jawandhia. “Indian farmers have not been adequately protected as compared to those in developed countries,” he says. Domestic prices of cotton have fallen because of a low import tariff of only 5 per cent on cotton as compared to 60 per cent for sugar, which is backed by a much stronger political lobby, Jawandia points out. The textile industry lobby is also resisting any rise in import duty of cotton. “They are buying foreign cotton although there are sufficient domestic stocks, claiming that otherwise their industry will collapse. But why should millions of farmers be squeezed so that the textile industry can run smoothly?” he asks.

Deriding the free trade argument, Jawandhia points out no such thing exists. International commodity prices have fallen because rich countries like the US, EU and Japan continue to protect their agriculture by heavy subsidies to farmers and imposing high import tariffs. For instance, Japan has a 1,000 per cent tariff on rice imports. Each farmer in the US got a subsidy of $29,000 per year in 1995, 100 times more than what an average Philippine resident earns in a year. Production subsidies account for 66 per cent of producer prices in Japan, 49 per cent in EU countries and 30 per cent in the US. Although India is allowed, under the WTO agreement, to put up import duties ranging from 100 to 300% on agricultural goods, it has chosen not to protect its farmers.

While farmers struggle to keep their head above water, whether Indian agriculture sinks or not finally depends on what policies the government chooses to adopt. Only by turning the tide on liberalisation can the government prevent small farmers like Nirmala from being left to brave the winds alone.

Frontline, Jan 19 - Feb 1, 2002 Also available here