|Demand of the question |
Introduction. Contextual Introduction.
Body. Various issues faced by sugar industry.
Conclusion. Way forward.
India is the only country in the world that produces plantation white sugar. Despite being the second largest sugar producing country in the world, worries of the sugarcane farmers are never ending.
Sugarcane industry is suffering from the following issues-
- Varying Prices: Sugar prices have fallen because of the demand-supply mismatch and sugarcane farmers have been incurring heavy losses. Fixation of Fair Remunerative Price is a bone of contention between the Centre and sugar mills. The Centre decides FRP annually and the states can hike it by issuing a state advisory price. But mills want the price of sugarcane to be linked to the price of sugar.
- Surplus Production: 36 MMT of sugar, against consumption of 26 MMT, is being produced since 2018, which involves high risks like high storage costs and spoilage. Further sugar prices in other countries are lesser than India, therefore Indian sugar suppliers are finding it difficult to export. E.g In Brazil, the price of sugar is ₹22 per kg while in India, we have fixed ₹32-34 per kg.
- Unpaid dues to farmers: Due to increased sugar production across the country, sugar prices are reduced so much that the sugar mills are finding it difficult to pay dues to farmers. Cumulatively they owe Rs 22,000 crore to farmers for cane supplied in 2017-18.
- Implementation of government policies: National Policy on Biofuels, call for blending petrol with 5 per cent ethanol. In 2015, the target was raised to 10 per cent. But this was never achieved. Brazil, the world’s biggest sugarcane producer, depends on ethanol, and not sugar, as main revenue source from sugarcane and blends 27 per cent ethanol with petrol. There are several impediments which include sugar subsidies, issue of exporting excess production of sugar, production of ethanol from sugarcane to use in cars and buying excess sugar and hoarding it as buffer stock.
- Infrastructure issues: Sugarcane is a weight-losing crop which needs to be crushed at the earliest from time of harvest. The poor connectivity, lack of transportation facilities and distant sugar-mills cause huge losses to farmers due to decline in quality of sugarcanes.
Some Measures to resolve sugar industry issues:
- Ease the market control of government on export and import must be done. The move is to help India to enable its exports. Leaving it all to the market is risky.
- The pricing shall be done on basis of scientific and economically viable principles.
- Rangarajan Committee proposed that the states should encourage development of market-based long-term contractual arrangements, and phase out cane reservation area and bonding.
- The new national policy on biofuels 2018, expands the scope of raw material for ethanol production by allowing use of Sugarcane Juice. Ethanol production should be promoted. Policy modifications to increase the ethanol blending is needed. Better prices for ethanol can also help in export of the same.
- Other crops should be promoted to ensure. This requires long-term investment, and the government will have to encourage farmers to cultivate crops like pulses and oilseeds.
- Sugarcane is a water guzzling crop. Better irrigation techniques to reduce the water usage, water harvesting, etc can improve water utilisation.
- In order to increase competition and ensure a better price for farmers, minimum distance norm should be reviewed. Removing the regulation will ensure better prices for farmers and force existing mills to pay them the cane price on time.
- Government should take proactive steps to maintain and revive growth in sugar industry like Sustainable Sugarcane Initiative.
- The Rangarajan committee recommendation should be considered and adopted as soon as possible.
- Further government should provide subsidy on new technology and equipment to both mill owner and farmers. New attractive schemes shall be launched for increasing investments and empowering entrepreneurs in sugar industry.