This Article is written by Shriyanshi Chitransh, student of Fimt School of Law, GGSIPU. Here she has given a brief explanation of the Sugar Cane Act, 1934.

Introduction

An Act no. of 15 of 1934 is titled as the Sugar cane Act, 1934 which balanced out the prices of sugarcane intended for the usage in the sugarcane factories and was passed by the Central legislature. It was up to the provincial Governments to apply the act in the whole country or any part of the province as they deem fit. Once the Act comes in force, it needs approval from the Provincial Government for the minimum fixed prices of sugarcane. The purpose of charging minimum fixed prices on sugarcane which lies in the hand of the local government prohibits the buyer from purchasing sugarcane from anyone but the growers and licensed cane purchasing agent and to amend rules regarding the weighments and other issues related with the administration of the Act. The act hereby enacted as follows:

Section 1 states the title, extension and commencement of the Act.

Section 2 gave the definitions to the Act.

Section 3 explained the declaration of the controlled areas and fixing of prices.

Section 4 mentioned the prior publication of notifications under section 3.

Section 5 specifies the penalty that shall be charged if the sugarcane is purchased at a price less than the minimum fixed price.

Section 6 sanction for prosecution under the Act.

Section 7 & Section 8 prescribed the power of the state Government to make rules.

Background

Sugarcane has been the most important and celebrated crops cultivated widely in India since time immemorial. Its cultivation and uses are mentioned in the ancient Indian literature as well as have a description in important books written during the time of various kings and also have been mentioned by various travellers that came to India during different periods. In ancient Indian literature such as Puranas it is mentioned that sharkara and gur are made from the juice of sugarcane. The Sugarcane Act, 1934 was enacted with the intentions of protecting the interest of the producers of the sugarcane and to diminish the role of middlemen in the purchase of the same. After the Independence, it was observed that the Agricultural Produce Market Ordinance, 1978 applicability was not included in the Act of 1934. The Act was enacted during the rule of British, therefore, the Act was initially extended to the whole of Pakistan, however in 1950, the Act was extended in the entire territories of India.  

Objective and scope of the Act

The main objective of the Act is to regulate the prices of the sugarcane that was supposed to be used for the factories and give the growers a fair price of their produce and protect their rights.  Government of Uttar Pradesh enacted the sugarcane rules in 1934 followed by Orissa and Bihar in 1935. In 1951, the sugar industry was controlled by the central Government under the Industry Development and Regulation Act. The initiative of fixing prices was left with the Provincial Government according to their local conditions. It was expected that the act should come into force as when the local government is ready to direct. In order to provide flexibility in the implementation of the procedure in the administration of the scheme, it was directed to give rule making powers to the Local governments as mentioned in the Gazette of India 1934, Part V on page 72. It was beneficial to fix the price for the sale of the sugarcane and assuring the sugarcane growers a fair price of their produce.

Important provisions 

Section 3 of the Act declared the controlled area from where the sugarcane ought to be purchased for the usage in factories. The declaration was made by the state government by publishing notification in the Official Gazette with the area considered for the controlled area along with the minimum fixed price of the cane which were intended to be used in the factories from the controlled area assigned. The state government also notified the restrictions of common purchasing of the cane from the controlled area for any factories. The restriction also includes that the sugarcane can only be purchased from the controlled area from the growers of the sugar cane or a licensed cane purchasing agent.  

Section 5 of the Act made penal provisions that provided that if anyone purchases the sugarcane from the controlled area declared by the state government at less than the minimum price fixed by the State Government then that person would be held liable under the aforesaid act. The punishment would be in the form of a fine of Rs.2000 maximum. The Act also made penal provision for the breachment to anyone who purchases cane from the controlled area other than the growers of the sugarcane and licensed cane purchasing agent as given by the state government in the official notifications. The complaint about the same has to be made from the district magistrate or local authority before reaching the Court.

Roles and responsibilities 

In the Journal of Royal Society of Arts (Vol.83 No. 4317),, it is stated that in 1935 the act came into operation in the whole of the United provinces and the north of Bihar, which approximately include 96 factories out of 142 factories of India. At the commencement of the season, an order was published with the minimum price of the sugarcane on a sliding scale, with a fundamental price of five annas for a maund of sugarcane conforming to an average price of Rs. 8/8 for the delivery of the sugar. Each rise and fall in the price of eight annas results in the rise and fall of the one-quarter anna in the minimum price of the sugarcane. The minimum price of the cane is informed two weeks before. For the Khandari factories, that are given in the factory act, have been prescribed with the minimum price of three and a half annas of the sliding scale.

During the fall season, the price of cane remained steady or was nearly five annas while the actual price of the cane remained at five or six and a half. The minimum prices had to be paid no matter which factories’ weighing stations the growers went for, the miscellaneous charges had to be paid by the factory. Any deduction in the price of the cane was illegal and the minimum price had to be paid except for the frost damaged cane.

The act curtailed the profit earned by the middlemen, who were banned to the growers of the cane and the factories. The Sugarcane Act authorized some rules that had to be formulated for an organisation of sugarcane growers into the societies for the sale of the sugarcane in factories. 

Critical analysis

The Sugar Cane Act 1934 was introduced to fixate the minimum price of sugar produced by the growers that has to be sold in the factories and the specified area the sugarcane has to be sold. These policies had benefits on growers as they were the only one authorised to sell but imposing minimum prices can be unviable for the growers of the cane as when they face any obstacles such as natural calamities or even less production they won’t be able to produce much which results in much less income. The Government curtailed the idea of middlemen which was good but the Government had to regulate orders to make the area organised. However, having so many policies on the sugarcane industry is a bane in the success of the mills and growers and some relaxation is very much needed. 

Significance of the Act

Sugar is one the most essential products being used in India and its regulation started in 1934 when the Sugar Cane Act was passed which enabled the State government to impose a minimum price on the sale of the sugarcane from the factories which has to be paid to the producers of the cane. Later in the year 1942, the Sugar Control Act was passed which prohibited the producers from disposing of the sugar to the dealers recognised by the Sugar controller. The sugar controller had the authority to limit the quantities and types of grades of sugar that was supposed to be grown by the producers and also fix sale prices and give the essential directions. Later in 1943 and 1946, Gur Control orders were issued by the government to fix the price of gur and to check the supply of sugar cane to the factories. Furthermore, articles were issued by the government in the year 1947, 1949 and 1950, which controlled the activities until the Constitution of the Republic of India came into force in 1950.

In 1955 the central government had the power to control the production and distribution of sugar and sugarcane in compliance with the Sugarcane (Control) Order, 1955 and the Sugar(Control) Order, 1966, which enabled the central government to put restrictions on the sale of sugar other than from the manufacturers with the license. The order had other powers to restrict the sale or delivery of sugar producers and other necessary directions about the storage and productions of the sugar. Later the SugarCane(Control) Order 1955 was replaced by the Sugarcane (Control) order 1966 that permitted the central government to fix the minimum price that has to be paid by the sugar producers from time to time. The price is fixed by keeping in mind with the cost of production, availability of sugar to the consumer at a fair price, the price at which the sugar was produced from the sugarcane that was sold by the producers of sugar and the recovery of sugar from sugarcane. In 1959, the Sugarcane Press-Mud (Control) Order banned the sale of press-mud by the producer of sugar to anyone other than the buyer who certifies that they would either sell it or use it as manure.

Until the mid-1960s, the sugar sector of the states was controlled by the Central Government. Due to the low Statutory Minimum Prices (SMP), it was redirected to the Gur and Khandsari units. Consequently, the state adopted the partial decontrol policy. And in 1970, the state Advisory Prices (SAP) came into existence. A major decision was taken by the central government of delicensing the sugar sector which means license requirements for new sugar mills were removed. Apart from these acts and regulatory orders, several special enactments have been passed since then to accommodate the price and provide an adequate amount of sugar supply to one who needs it in this huge populous country. 

Recommendations

Overall it appears that even after the existence of the economic reforms in India, the conditions of the sugar sector aren’t rich and highly controlled by the Government. Considering the fact that after the application of so many acts and provisions, no other agro-based sector has suffered as the sugar industry did. Recently the delicensing policy gave rise to an unhealthy competition among the growers. Although many efforts have been made by the government to promote the cultivation of sugarcane which can have benefits in the short-run but not in the long run. The unhealthy control of the Government has been causing uncertainty in the income of the growers and mills. In order to address the problem the state intervention has to be reduced. The sugar mills should be allowed to keep some amount of profit into their possession as reserves, and these reserves can be used whenever the sugar mills are unable to pay the FRP. The Government has to look at the bigger picture and implement order for the benefits of all the sectors. 

Conclusion

The act passed had its merits and demerits back then and since many regulatory provisions have been enabled. The act was the first act which was passed keeping in mind the interest of the growers and sugar mills. 

References

• https://lawyerslaw.org/the-sugar-cane-act-1934/
• https://indiankanoon.org/doc/996474/
• http://www.fao.org/3/X0513E/x0513e16.htm#:~:text=The%20main%20objective%20of%20the,Sugar%20Cane%20Rules%20in%201934.
• https://www.jstor.org/stable/41360530?read-now=1&seq=19#page_scan_tab_contents

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