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Sugarcane Sweet Transactions

By Author: Sanjeev Chopra
Total Articles: 14

Sugar is sweet, but sugarcane growers are often bitter about the long queues at sugarcane factories, disputes about quantity and quality and uncertainty about the norms of payment. Motorists and other highway users also dread the ‘crushing season’ when all roads to sugarcane factories are clogged with tractor trolleys and bullock carts. More often than not, farmers find it easier to leave their stocks with intermediaries who then undertake the transactions with the sugar factories as farmers find it extremely distressing to have to wait like supplicants to get a fair price for their produce.

Fortunately these issues have been addressed through the Sugarcane Information system , an initiative of the Sugarcane Development and Sugarcane Industries Department of Uttar Pradesh under the leadership of the then Cane Commissioner Kamran Rizvi . what is remarkable about this initiative is that it has introduced transparency at Zero cost by understanding the process, and simplifying it by making simple interventions like SMS (in Hindi) to reach out to the largest numbers. This is information revolution in the truest sense, and also opens up the possibility of replication in several other domains, especially procurement operations undertaken by FCI and Nafed.

Bur first, a few words about the domain of sugarcane in the state of UP. Over thirty lakh farmers supply cane to one hundred and twenty five sugar mills in the state – which produce half the sugar in the country. Before the introduction of the system, farmers were not sure when to harvest the crop, and when to bring it to the factory – thereby leading to situations of sub-optimal utilization of crushing capacities on the one hand, and loss of sucrose content on the other if the harvested cane was not utilized immediately. Besides inaccuracies with regard to survey and loss of output on account of delay, it paced the farmer and the factory in an adversarial position, which would often take violent turns and break out as a law and order situation. While farmers were resentful of the lack of concern and basic amenities while waiting, the factories felt they were being subjected to undue pressure. District administrations just wanted the crushing season to pass off without an incident on their head, and the local politicos wanted to make their presence felt by raising demands, which even they knew could not be met.

It must also be borne in mind that the issues between farmers and the mills were more to do with the operational aspects of procurement- for prices of cane were decided by the CACP, and often the state gave a ‘bonus’ as an incentive, often under pressure from farmers groups. Thus interventions made under this initiative had more to do with understanding how the system worked, and the clear realization that the relationship between the farmer and the factory was not, ipso facto, adversarial. The Sugar cane Department collaborated with the sugar mills and growers societies, and prepared a factual data base of the growers, including details like landholding, area under sugarcane, details of Kisan credit card and expected time of maturity. The system was made available on website- but more importantly on the mobile phone of the farmers . This enabled the farmers to save transaction time and transaction cost – which in value terms for all thirty lakh famers comes to nearly Rs 850 crores per year. However, these savings to farmers were not at the cost of the sugar mills – for they also gained Rs 700 crores in the process. Te cost of the system to the sugarcane factories was just 12.5 crores. The system generates over 1.5 crores sms per year, besides 28 lakh calls, and 35 lakh hits /queries on the website.

What are the implementation highlights? The first is the Collaboration and Trust. While the cost of the system was borne by the sugar mills, the grower societies provided the database, it was the cane Commissioner’s office which planned the system, and also helped the facilitation and integration. In Kamran Rizvi, the SIS had a mentor to transform it from a concept to reality. The second component was Accessibility. The system was designed to allow access to all stakeholders with different levels of literacy- website for those who were literate and had access to a PC,SMS for medium level literates who owned and used a mobile phone, and IVRS for low level literates who could only receive and make calls. The third was Transaction Records. Hand held computers connected to the main centre at the sugar mill prints the weight slip, and sends the SMS regarding the transaction. The grower’s database is also uploaded automatically with this information. The fourth element was Standardization - all sugar mills and grower’s societies had the same norms for delivery schedules, payments to farmers, payment to transporters and society commission – all of which were also recorded in a transparent manner. Last but not the least – all stakeholders received training to familiarize themselves with the system.

This intervention has now been converted into a case study for the young entrants to All India, Central and state civil services by the Department of Administrative Reforms which has the mandate of communicating the key recommendation of the Administrative Reforms Commission to the stakeholders. Rather than read out chapter and verse from the report, case studies like this will go a long way in generating discussion among the participants about how technology and system interventions can be made when voluminous public transactions have to be steered. This will also provoke many young administrators to ask: if this can work for sugarcane, why don’t we have a transparent system for procurement of paddy and pulses? Why don’t we devise a similar system for our PDS and fertilizer shops? Surely, we can – for one positive stroke leads to another, and the virtuous cycle gains momentum!

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