Updated: November 20, 2009 23:15 IST

Sugarcane controversy ends

New Delhi Bureau
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Life and Death Issue: Sugarcane farmers crowd a flyover as they return after a protest against the new sugarcane ordinance of the Government, in New Delhi on Thursday.
Life and Death Issue: Sugarcane farmers crowd a flyover as they return after a protest against the new sugarcane ordinance of the Government, in New Delhi on Thursday.

The raging sugarcane controversy ended happily on Friday after a political consensus emerged on the contours of an amended legislation at an all-party meeting called by Leader of the House in the Lok Sabha Pranab Mukherjee.

The Opposition parties hailed the consensus as a “victory for farmers.” The government was relieved that all parties had agreed to support legislation to nullify the impact of a Supreme Court order under which it would have to pay Rs. 14,000 crore in arrears to sugar mills going back some 30 years. It was agreed that the amended Bill would be moved in Parliament on Monday.

Party leaders emerged from the meeting with broad smiles on their faces. Communist Party of India leader Gurudas Dasgupta said: “The farmers’ movement has won. Status quo ante will be restored.” BJP leader Sushma Swaraj described the happy ending as a “victory of the democratic agitation by farmers.”

The legislation will validate the process by which the government has been calculating the price it pays for levy sugar for distribution through ration shops, and two, the controversial clause 3B will be dropped to restore status quo ante on the State government’s power to declare a State advised price (SAP) for sugarcane that mills will pay to farmers as in the past. The only difference will be that the Centre’s minimum support price will be called fair and remunerative price (FRP) in the case of sugarcane.

The controversy erupted as the Centre proposed an FRP of just under Rs. 130 a quintal of sugarcane at a time when the market price was above Rs. 200. The government’s (now dropped) proposal was if the State governments were to suggest a higher SAP, the difference would have to be paid by them to farmers, not the mills. The result: the State governments would not declare SAP, farmers would have got less for their produce in accordance with the Centre-declared FRP and mill owners would benefit by getting cane cheap. This part of the proposed amendment has now been dropped altogether.

Agriculture Minister Sharad Pawar, Parliamentary Affairs Minister Pawan Kumar Bansal, T.R. Baalu (DMK), Ms. Swaraj (BJP), Mr. Dasgupta (CPI), Ajit Singh (Rashtriya Lok Dal), Reoti Raman Singh (Samajwadi Party) and Basudev Acharia (CPI(M)) were among those who were part of the consensus at the meeting chaired by Mr. Mukherjee in Parliament House.

Mr. Mukherjee told party leaders that the government was prepared to roll back its proposal and it had no intention of harming the interests of farmers. It then took just a few minutes to arrive at a consensus.

After the meeting, the government admitted to “misgivings” resulting from a clause that placed the burden on the State governments of paying farmers the differential between the FRP and the higher SAP. “It is now proposed to delete this clause altogether,” it said.

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