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Sugarcane sop for Mayavati bailout

New Delhi, Aug. 23: In a bid to stave off a popular agitation against the Mayavati regime in Uttar Pradesh, the BJP-led NDA government today cleared a controversial Rs 678-crore plan to pay sugarcane farmers the money the state had promised sugar mills would give them.

The “one-time” dole not only bails out the mill owners who were unwilling to pay farmers their promised dues, but also takes the heat off the Mayavati-led coalition government in which the BJP is a partner.

The state government has been struggling to deal with the popular agitation fanned by former agriculture minister Ajit Singh in western Uttar Pradesh, the country’s largest sugar belt.

Singh, who has been fighting the mill-owner lobby for the release of the dues, termed today’s announcement “a sellout to sugar mill owners”.

The announcement was meant to take the wind out of this movement but may actually lend credence to Singh’s claims that the BJP government is pro-mill owner and anti-farmer.

Cane farmers were agitated that mill owners were not paying the state assured price (SAP) announced at the beginning of the sugarcane season 2002-03. The Uttar Pradesh government had announced a price of Rs 95 per quintal, a rate which it had frozen from the previous year.

The SAP, announced by most north Indian states every year, was Rs 26 more than the minimum price announced by the central government this year. Sugar mill owners went to court to challenge the payout even though they bought cane from the farmers against promissory notes.

While some mill owners paid the central price and refused to pay the higher state announced price, others just did not pay any money to the farmers.

Singh leads the Rashtriya Lok Dal, a small party which is active in western Uttar Pradesh and parts of Rajasthan, and has been smarting from the humiliation of being dropped recently from the Union cabinet after squabbling with BJP leaders over a number of farmer-related issues. He decided to take advantage of the situation and launched an extremely popular agitation.

Leaders of the BJP and the Bahujan Samaj Party from that region were apprehensive that the controversy could snowball and become a major election issue that could hurt the fortunes of the ruling coalition at the Lok Sabha elections scheduled for next year. Politicians close to Singh said the bailout plan was cleared with that in mind.

The bailout will be in the form of a soft loan payable over six years with a three-year moratorium at a 4 per cent rate of interest.

Four other states will also benefit from the largesse: Haryana (Rs 84.73 crore), Uttaranchal (Rs 32.25 crore), Bihar (Rs 39.91 crore) and Punjab (Rs 30.96 crore).

The travails of the BJP government, however, do not end here. As Singh points out, today’s bailout is a one-time measure. It gives mill owners the opportunity to refuse to pay state-determined prices in future years.

More important, ministers from Maharashtra and Andhra Pradesh have started demanding that a different package for cane farmers from that region be drawn up so that the central largesse is not limited to just the northern states.

Health and parliamentary affairs minister Sushma Swaraj, who made today’s announcement, acknowledged as much, stating that a different assistance package for cane farmers from these states would be drawn up and brought before the cabinet later this month.

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