Sugar is an essential commodity and in India, it is very much politically sensitive. The industry has been subjected to a number of controls and regulations. SP Singh in his research, ‘Assessing Efficiency Trends in the Indian Sugar Industry’, states that, “these controls and regulations, including fixation of State, Advised Prices (SAP) of sugarcane over and above the centrally determined Fair and Remunerative Price (FRP) would have adverse impact on the economics of the industry.”
The Government had formed several committees to remove the industry’s bottlenecks and give it an overall boost. Singh in his paper says, “the government accepted some of their recommendations and the industry was de-licensed in 1998 and subsequently partially de-controlled.”
However, it has been noted that the industry continues to have a number of regulations including fixation of prices of sugarcane; control over the supply of sugarcane and sugar by-products like molasses. As per the Journal of Economics and Finance, ‘Impact of Policy of Government on Import and Export of Sugar from India’ (2014), “government control covers all aspects of sugar business – licensing, capacity, cane area, procurement, pricing, distribution, imports and exports.”
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And water is another major problem. Sugarcane requires a lot of water. According to Czarnikow, “sugarcane requires between 1,500mm to 2,500mm of annual rainfall with a growing season ranging between a minimum of 9 months to 18 months for a newly planted crop.” Moreover, the development of cane crop is very sensitive to water. “Shortage of water in the early growth phase can halt development and prove severely detrimental to yield while rainfall in the final ripening phase results in lower sucrose recovery.”
Another issue to bring forth is the cost of production. The ‘7th International Conference on Science, Technology & Management – Challenges Faced by Sugarcane Mills and Farmers in India’ in 2017 highlighted that “high cost of sugarcane, inefficient technology, the uneconomic process of production and heavy exercise duty result in high cost of manufacturing. The production cost of sugar in India is one of the highest in the world.”
The conference proposed that intense research was required to increase the sugarcane production. “Introduce new technology of production efficiency in the sugar mills. Production cost can also be reduced through proper utilization of by-products in the industry, such as bagasse can be used for manufacturing paper pulp, insulating board, plastic and carbon cortex etc.”
In the field, the sugarcane farmers are troubled by lack of finance and technical guidance. Because of the lack of finance, they are not able to purchase fertilizers and pesticides and labour to harvest the cane. They are not able to get the fields watered. The government and millers should address the farmers plight. They should consider capital-intensive techniques and provide timely subsidies. The farmers should be provided with mechanical assistance such as tractors and plough to prepare the fields for the season. The agriculture department should hold monthly workshops to educate the farmers with relevant techniques, skills and good agricultural practices.
India’s sugarcane industry is the second largest agro-based industry in the world. Sugarcane is planted in the states of Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka, Gujarat, Madhya Pradesh, Uttar Pradesh, Bihar, Goa, and Kerala.