Email: kunal.munjal17@gmail.com

Affiliation: Indian Statistical Institute, Bengaluru & Indian Institute of Technology, Hyderabad

Nationality: Indian

Commercialisation, Unequal Exchange and Differential Outcomes: Sugarcane Economy of a Western Uttar Pradesh Village (2006–2023)

Abstract

Agricultural commercialization is seen as a driver of rural transformation and capitalist development, fostering higher farm incomes, specialization, and mechanization. However, its effects are uneven, deepening rural inequalities as smallholders face high transaction costs, weak institutional support, and elite capture. Sugarcane expansion, particularly in Africa and Latin America, has intensified land conflicts and dispossession for smallholders. India is the second- largest sugar producer globally, with Uttar Pradesh (UP) leading among states. A sugar boom has occurred over the last two decades, driven by a high-yield cane variety, private sugar mill expansion, and modernization of marketing infrastructure. Sugarcane in UP is grown on small family farms (2ha) in an outgrower model. Unlike fully liberalized markets, it operates through state-set pricing and regulated mill-linked supply chains, ensuring assured returns.

In this paper, drawing on secondary and primary data, I examine three critical questions: firstly, how has the expansion of the sugarcane economy transformed production conditions and agrarian relations within villages? Secondly, how unequally are the gains of commercialization distributed across class and caste groups? Thirdly, how have changes in market structures and modernization affected market access and outcomes for different sections (by caste and class)? The study utilizes longitudinal household survey data (2006 and 2023) from the Foundation for Agrarian Studies (FAS) archive and extensive fieldwork (2022–2024) in a western UP village (Harevli). Tyagis (upper-caste Hindus) are the dominant landowning caste, while Chamars (SCs) and Dhivars (OBCs) are the primary labouring caste groups.

Findings show an expansion of sugarcane from 52% to 65% of cultivated land in the village and significant changes in agrarian structure between 2006 and 2023. Tenancy increased as land-poor Chamar and Dhivar households leased land from Tyagi landowners for sugarcane and wheat, unlike only paddy before. While this expanded participation of marginalised caste households in commercial agriculture, high rents, exclusion from institutional markets, and dependence on landowners led to uneven economic gains.

Three dimensions of commercialization reinforced caste inequalities: differential returns, unequal market access, and persistent agrarian interlinkages. Tyagi landlords, cultivating owned land, earned higher per hectare incomes, while tenant Chamarand Dhivar farmers, paying high rents on leased land, remained in structurally lower-return agriculture. Market access further deepened disparities; under UP’s state-controlled post-harvest economy of sugarcane, dominant caste farmers secured preferential benefits through clientelist relations with sugar mills and cooperative societies. Tenants had to sell part of their output in informal markets below state-set rates, reducing net incomes. State interventions modernized procurement and improved payment transparency but primarily benefited landowners. Tenant farmers remained excluded from formal output and input-credit markets, limiting their competitiveness. Pre-capitalist agrarian interlinkages persisted in new forms. Chamar and Dhivar households, historically tied to Tyagi landlords as long-term labourers (naukars), now remained dependent as tenants. The tenancy arrangement bound Dalit and Dhivar household labour supply to Tyagi landowners' farms for the seven-month sugarcane harvest, the village's most labour-intensive agricultural task.

Unlike regions where commercialization led to dispossession,UP’s sugarcane economy is characterised by caste-mediated tenancy expansion.While commercialization improved land access for land-poor households,unequal exchange and interlinked transactions resulted in differential outcomes.

Bio

I am a Senior Research Fellow at the Economic Analysis Unit, ISI-Bengaluru, and a Ph.D. scholar in Development Studies at the Department of Liberal Arts, IIT-Hyderabad. My doctoral work is in the domain of agrarian studies, commodity geographies, agricultural markets, and rural industrialization. I conduct interdisciplinary research, based at the intersection of development economics, political economy, and economic sociology and geography. I employ a mixed-methods approach, combining quantitative, statistical analysis with qualitative, ethnographic fieldwork. Fieldwork is a central component of my research. I hold an undergraduate degree in social work (rural development) from Tata Institute of Social Sciences (TISS) and a post-graduate degree in public policy from National Law School of India University (NLSIU), Bengaluru, India.