05 October 2022 – The Indian Express

Sugarcane Production In India

Historical Background:

• Sugar production has a long history in India.
• There are allusions to Indians growing sugar cane already in the Atharva Veda.
• India is rightfully considered to be the birthplace of sugar. Gur and khandsari, however, were made in antiquity.
• Before the juice from the cane was removed, boiled, and spun until it solidified, it was also broken up and crushed under a great deal of weight.
• The Sanskrit word for irregularly shaped and sized solids is “gravel”.
• The word “sugar” as we use it now comes from the Sarkara language.
• Thus, sugar production and sugar cane farming originated in India.
• The Dutch only introduced modern sugar production to India in the middle of the 19th century after bringing it to North Bihar around 1840.

Legislations:

• The “Sugar Industry Protection Act” was enacted by the Indian Parliament in 1932.
• Under this law, the neighbourhood sugar industry received protection.
• The Sugar Protection Act’s implementation allowed the country to become totally sugar independent by 1935.

Geographic Distribution of the Sugar Industry in India:

• Uttar Pradesh: The state is the top producer of sugar in the nation and has one of the largest sugar mills in the Indian economy.
• Punjab, Bihar, Karnataka, Haryana, and Maharashtra
• Tamil Nadu produces 10% of all the sugar produced in India.
• Andhra Pradesh is renowned as the “granary of the south” and was originally known as the “Rice Bowl of India” in addition to producing sugar.

India’s North and South’s Sugar Industry

• The differences between the sugar industries in northern and peninsular India are briefly explained below:
• The peninsula of India has a tropical climate that results in a higher yield per unit area than north India.
• The tropical variety of sugarcane has a higher sucrose concentration in the south.
• The crushing season is also longer in the southern region than in the northern region.
• For instance, the southern crushing season lasts about 7-8 months, starting in October and continuing through May and June, but the northern crushing season only lasts about four months, from November to February.
• The cooperative sugar mills are better managed in the south than in the north.
• The vast majority of mills in the south are brand-new and employ cutting-edge technology.

The sugar industry’s problems:

• Numerous urgent problems in the sugar industry in India need immediate attention and reasoned answers. The brief descriptions of some of the urgent issues are as follows:

Low Yields of Sugarcane:

• India has the most territory dedicated to sugarcane farming, but compared to some of the other top producers worldwide, its output per hectare is incredibly low.
• For instance, India’s output is far lower than Java’s and Hawaii’s, at 90 and 121 tonnes/hectare respectively.
• Overall production thus falls short of capacity or potential.

a short period of crushing

• With a brief crushing season that normally lasts between four and seven months every year, sugar production is a seasonal phenomenon.
• The rest of the year is spent with the mills and their staff idle, which affects the sector’s finances overall.

Different Production Trends

• Sugarcane must contend with competition from other food and cash crops including cotton, oil seeds, rice, and others.
• As a result, the amount of area that may be used for sugarcane farming varies, which affects the production as a whole.
• This affects both how much sugar is produced annually as well as how much sugarcane is given to the mills.

Low rate of recuperation

• India has a recovery rate that is relatively low—less than 10% on average—when compared to other major sugar producers.
• For instance, in Australia, Hawaii, and Java, the recovery rate could be as high as 14–16%.

Costly production

• The high cost of sugarcane, inadequate technology, unfeasible production methods, and hefty excise duties all contribute to the high cost of manufacture.
• The cost of manufacturing sugar in India is among the highest in the world.

Smaller, less effective mill sizes

• The bulk of sugar mills in India have a daily capacity of 1,000 to 1,500 tonnes.
• Therefore, large-scale production is not profitable. Many of the mills are not making any money.

outdated and inefficient machinery

• A large portion of the machinery used in Indian sugar mills, particularly those in Uttar Pradesh and Bihar, is outdated and is 50–60 years old.
• However, due to slim profit margins, a number of mill owners are unable to purchase new machinery.

Gur and Khandsari’s conflict

• Khandsari and gur were made in rural India prior to the growth of the organised sugar industry there.
• The khandsari industry is able to pay cane growers more money since it is free from excise taxes.
• Additionally, cane growers use their own cane to make gur, which reduces labour costs in a way that is not possible in the sugar industry.
• The organised sugar industry lacks a sufficient supply of this crucial raw material because khandsari and gur are produced from about 60% of the cane grown in India.

 regional disparities in distribution

• Maharashtra and Uttar Pradesh, where more than half of the sugar mills are located, produce over 60% of the world’s sugar.
• However, in a number of northeastern states including Orissa, Jammu & Kashmir, and many others, this industry is not growing considerably. This leads to regional imbalances, which have their own effects.

Problem-solving approaches:

 Putting the Rangarajan Committee’s suggestions into practise:

• Removal of the Distance Standard: The Committee recommended that the distance requirement be reviewed in order to promote more competition and ensure that farmers receive a higher price. By eliminating the rule, farmers will be guaranteed greater prices, and present mills will be obligated to pay farmers the cane price.
• Examining the Revenue Sharing Agreement, it is recommended that States not make public their own SAP. Sound scientific and economic concepts must be followed when setting prices. The group suggested that mill owners and farmers should receive 70:30 of the profits made along the sugarcane supply chain. This method will be applicable to byproducts as well. The payment will be made in two instalments to farmers:
• When purchasing sugarcane, farmers should receive First Floor Payments, or FRP. Once the mill establishes the final sugar price, the remaining balance must be paid.
• Duty: Import and export taxes shouldn’t total more than 10%.
• Long-term agreements: In order to gradually abolish the cane reservation area, states should encourage the creation of long-term contractual agreements based on the market.
• Exports and byproducts: Exports of sugar are no longer expressly forbidden. Sales of byproducts shouldn’t be restricted, and the market should determine prices.

Other suggestions:

• Price Rationalization: Cane pricing regulations must be rapidly rationalised and brought into accordance with international norms if the Indian sugar industry is to successfully export the surplus.
• Ethanol Blending: The new national policy on biofuels, effective in 2018, expands the variety of raw materials available for the production of ethanol by allowing the use of sugarcane juice. Ethanol production has to be promoted. The price of importing oil will be reduced by such a diversion, and the sugar industry’s earnings will rise. a situation in which everyone wins. Brazil, the greatest producer of sugarcane in the world, produces ethanol instead of sugar as its main source of income by blending 27% ethanol with gasoline.
• R&D: Considerable study should be funded to develop sugarcane varieties with high yields, quick maturation, cold resistance, and high sucrose content.
• By regularly growing and harvesting sugarcane in various sites adjacent to the sugar mill, the crushing season can be extended. As a result, sugar mills will have more time to access sugarcane.
• Yield: A lot of research is required to increase sugarcane productivity in the agricultural sector.
• Production Cost: Production costs can be reduced by effectively utilising industry waste.
• For instance, bagasse can be used to create paper pulp, plastic, carbon cortex, insulating board, and more. Molasses is another important by-product that can be used profitably to produce power alcohol.