India Needs To Be Urgently De-addicted From Sugarcane Farming And Sugar Production

by Jaithirth Rao - Jun 4, 2016 12:16 PM +05:30 IST
India Needs To Be Urgently De-addicted From Sugarcane Farming And Sugar ProductionSugar cane being transported. (Photo: Getty)
  • We need to come up with a plan to systematically encourage sugarcane farmers to switch to other less water-guzzling crops. Otherwise, India will, quite simply, become a desert.

The Law of Unintended Consequences has a strange way of playing out in human affairs. Someone, somewhere, invented an electric device known as a pump set which is capable of extracting water from aquifers that are deep down in mother earth. Someone, somewhere else, invented another device—a mobile boring machine, which could be moved around in order to dig deep bore wells anywhere and everywhere. Quite unrelated to these technological happenings, the government of British India, sometime in the 1930s, decided to impose a tariff on imported sugar. All these happenings in history have now resulted in the unintended consequence of water tables going down to unprecedented levels and to an accelerated desertification of our fair land.

In the process, we have created millions of sugarcane farmers, hundreds of sugar factories, not to mention powerful sugar barons. It is not that we did not know. Going through my files, I came across a column I had written in The Indian Express some 11 years ago. It is worth quoting a sentence: “One can only hope that no Indian leader consciously wishes to be the ‘desert maker’ of the 21st century.” If someone as silly as this writer could see it coming, was it not obvious to the mandarins of the exalted Central Water and Power Commission?

Economists in the US have repeatedly pointed out that it makes no sense for the US to grow sugar, which should ideally be imported from Brazil and Cuba. But the US sugar industry, which is controlled by a handful of companies (mostly privately held) has ensured that the totally illogical (in economic terms) US industry survives and prospers—at the expense of US consumers and Brazilian farmers, one might add. We in India are in a similar logjam. Whether we like it or not, we have a sugar industry. We grow so much of this water-intensive crop that there are years when we export the stuff. At the same time, we import oilseeds and pulses which consume much less water and which, an agronomist would argue, should ideally be grown in Indian conditions. But the vested interests that have arisen over the years, leave us in a state of gridlock.

There is no young boy in India who can say that our sugar-coated emperor is without clothes. If anyone so much as whispers this, the mighty barons will descend like a ton of bricks. And they will have paid lackeys—economists and hydrographers who will tell us that the sugar industry is benign and good. They might even argue that the sugar industry is water-neutral or actually improves our water situation. Remember—there are always experts available, who, for a price, will testify to anything! We have over the years not just protected our sugar industry with tariffs and import restrictions, we have actively subsidized the water that is drawn out from India’s earth. People who mine coal or iron are required to pay royalties. People who ‘mine’ water have no such levy imposed on them. Instead, they are given free electricity to encourage them to drill deeper and take out more water. Till recently, they were given subsidized diesel in order to help them when our electricity boards resorted to the ever-present ‘power cuts’. We prescribe inordinately high support prices for sugarcane, giving farmers the signal to grow more sugar and pump more water.

Every few years, when the sugar mills cannot or will not pay the farmers, we intervene, giving more tax payer money to bankrupt sugar mills to pay farmers’ arrears which perhaps they do in some desultory fashion. Sugar cane farming and our clever/well-connected/patriotic/matriotic sugar industry have become a veritable albatross around the necks of thirsty Indians. And since this discussion needs to remain relatively sweet, let me not bring up the scandalous issue of using groundwater to grow rice in parts of India which are pretty unsuited for this other water-guzzling crop. The lobby for a perniciously high support price for rice and for free electricity for rice farmers may be smaller than the sugar lobby—but reports have it that this great lobby is far more vicious.

When I say that we are like the US, I am actually being fallacious. The US is largely a temperate zone country and in the Great Lakes, they possess some of the largest freshwater bodies in the world. We are largely a tropical and sub-tropical country and are heavily dependent on monsoon precipitation. While the US may pay a small price for stupidly supporting an uneconomic sugar industry, we are inflicting a catastrophically high price on ourselves. We are a country where water needs to be conserved, valued and used sparingly—not one where water-intensive activities are recklessly encouraged and subsidized. Unlike other ecological concerns—like the disappearance of the vulture or the possible disappearance of the tiger—the consequences of which may come to haunt our grandchildren, the water table problem is upon us now. And we are still finding it difficult to act.

Is there a way out? There always is a way for humans to ‘solve’ problems that humans have in the first place, created. But this requires a level of consensus and a collective will which, let us face it, has been extremely rare in our country. The best way to think of sugarcane (let’s start with sugarcane and leave rice for later, although this is bound to result in pro-sugar mobs trying to go on the rampage!) is to equate it with opium. In many countries, opium farmers are actually paid to stop opium cultivation and encouraged to switch to less lethal crops. We will need to come up with a plan to systematically encourage sugarcane farmers to switch. While we can have a national plan, this should ideally be implemented district by district. At the same time, we will have to literally buy out several sugar factories and shut them down. This will be costly. But the cost of letting these factories continue to operate will be much more.

Now, pulling off a major economic/agronomic change like this would be a challenge in any country. Trying it in India sounds like an idea bordering on the quixotic and the impossible. But try we must. The alternative is for many districts of our country needing to be renamed Sahara, Kalahari or Thar. Given that strong political interests and constituencies are involved in sugar (in this regard, we are no different from the US), this can only happen if a genuine all-party, integrated, supremely disinterested institutional process is set up. As a first step, we should avoid vicious attacks, name calling and attempts to derive political mileage. It should be clear, as I said at the outset, that no one individual or group is consciously responsible or at fault—least of all the sugarcane farmers or the sugar mill workers. We have gotten to where we are as a result of the law of unintended consequences. Mistakes made along the way arose from benign intentions like supporting farmers or developing a strong indigenous sugar industry. Yes—the experts in the now defunct Planning Commission should have seen it coming. But we now know that they were idiots and they stand disbanded.

There is no point in looking for scapegoats to blame. Any attempt to introduce draconian bans or changes by diktat will have blowbacks which will result in the remedy being worse than the disease. If we try to implement a permit-license regime for bore wells or some kind of state monitoring of water use, not only will it not work, we will almost certainly increase the number of criminal gangs in our country. The proverbial Sanskrit danda (punishment) is not the correct tool of statecraft in these circumstances. We must methodically and efficiently ‘incentivize and motivate’ a de-addiction from sugarcane farming and domestic sugar production just the way we have over the years pushed the addiction along. If in the process, we are seen as ‘incentivizing’ pulses or oilseeds, we can see this as a bonus—always keeping in mind that another set of excess subsidies may result in another problematic ‘unintended consequence’ coming up 30 years from now. A ‘National Crop Policy’ is not a Stalinist/Maoist idea that we can or should adopt. But a conscious policy to dismantle a structure that has developed over many years, using incentives and signals, rather than force and fiat, is the only serious option left.

The situation in the summer of 2016 is dire in our country. If we have a decent monsoon in the next couple of months, we run the risk of succumbing to fatal complacency and postponing our extrication from the sugar-coated (and need I say, rice-coated) cul-de-sac that we are trapped in. We need—we desperately need—an all-party, national, consensual institutional structure and process. We do not have a good track record in this regard. But that is not a reason not to try. For the alternative is to see within a decade or two, large parts of our fair Bharata Varsha being depopulated and with the few remaining residents left feeding on cactus flowers. We owe ourselves and our children a better canvas. Shakuntala’s son who gave his name to our country would have expected no less of us.

This article was published in the May 2016 Issue of Swarajya Magazine. To subscribe, click here.

The author is the former CEO of MphasiS, and was head of Citibank’s Global Technology Division. He is currently the Executive Chairman of Value and Budget Housing Corporation (VBHC), an affordable housing venture. Rao is a member of the Editorial Advisory Board of Swarajya.

The author is the former CEO of MphasiS, and was head of Citibank’s Global Technology Division. He is currently the Chairman of Value and Budget Housing Corporation (VBHC), an affordable housing venture.

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