Governance & Social Justice
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- What is Financial Inclusion? What are the last mile challenges of Financial Inclusion?
- Union Budget 2021 – Is the Government selling everything? What are privatisation plans of Government?
- Sugarcane Farmers in Uttar Pradesh – What are the problems faced by UP sugarcane farmers?
- Union Budget 2021 – Urban Mobility Policy announced by Finance Minister in Union Budget 2021
- India’s first Geothermal Energy Project in Ladakh – ONGC signs MoU with Ladakh Government
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- Liberalisation, Privatisation,and Globalisation – 30 years of LPG reforms – How India has changed?
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Defence & Security
Science & Technology
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- Role of Technology in Law Enforcement – How technology is a force multiplier for Law Enforcement?
- What is Hydrogen Economy? How India is planning to run cars on hydrogen?
- Solid Waste Management – Types, Methods, Challenges & Solutions for Solid Waste Management
- Status of Climate Finance in 2020 – Why 2020 is declared as Year of Green Wave
- What is Green Tax and New Scrappage Policy? How they complement each other? Will they succeed?
- What is Land Degradation? Causes & effects of Land Degradation – Sustainable management of Land
- Vulture Conservation in India – Causes and consequences of decline in Vulture population
- What is Ozone Depletion? Facts, causes and effects of Ozone Depletion explained
- What is Eutrophication? Types, Causes and Effects of Eutrophication explained
- GS3 II Economy II Agriculture II Agricultural Production & Productivity
Why in the news?
A payment crisis running into thousands of Crores of Rupees is facing Sugarcane farmers.
- Sugar Industry is one of the most important agro-based industry in India. Sugar industry is seasonal in nature and its working period is only for 120 to 200 days in year.
- In India, sugar industry is the second largest industry after textiles. The country is the second largest sugar producer in the world.
- The sub-tropical region (Uttar Pradesh) contributes almost more than 50% of India’s total sugar production, while the balance comes from the tropical region, mainly from Tamil Nadu, Karnataka, Maharashtra and Madhya Pradesh.
- The sugar industry is one of the world’s major agro-based industries. Maximum global sugar production comes from the top 10 producers, of which the top three (Brazil, India and the European Union) contribute 40% of the total
Problems of the sugar industry:
- The problems with the sugar industry can be broadly divided into two parts viz. natural issues and policy issues
- The biggest problem of the Indian sugar industry is that it is one of the most politically sensitive commodities. Sugar is also an essential commodity as per essential commodities act.
- Low yield of sugarcane: Although India has the largest area under sugarcane cultivation, the yield per hectare is extremely low as compared to some of the major sugarcane producing countries of the world.This leads to low overall production and results in short supply of sugarcane to sugar mills. Efforts are being made to solve this problem through the introduction of high yielding, early maturing, frost resistant and high sucrose content varieties of sugarcane as well as by controlling diseases and pests which are harmful for sugarcane
- Short crushing season: Manufacturing of sugar is a seasonal phenomenon with a short crushing season varying normally from 4 to 7 months in a year. The mills and its workers remain idle during the remaining period of the year, thus creating financial problems for the industry as a whole
- Fluctuating Production Trends: Sugarcane has to compete with several other food and cash crops like cotton, oil seeds, rice, etc. Consequently, the land available to sugarcane cultivation is not the same and the total production of sugarcane fluctuates. This affects the supply of sugarcane to the mills and the production of sugar also varies from year to year.
- Low rate of recovery: Average rate of recovery in India is less than ten per cent which is quite low as compared to other major sugar producing countries.
- High cost of Production: High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duty result in high cost of manufacturing. The production cost of sugar in India is one of the highest in the world. Intense research is required to increase the sugarcane production in the agricultural field and to introduce new technology of production efficiency in the sugar mills
- Small and uneconomic size of mills: Most of the sugar mills in India are of small size with a capacity of 1,000 to 1,500 tons per day. This makes largescale production uneconomic. Many of the mills are economically not viable.
- Old and obsolete machinery: Most of the machinery used in Indian sugar mills, particularly those of Uttar Pradesh and Bihar is old and obsolete,being 50-60 years old and needs rehabilitation. But low margin of profit prevents several mill owners from replacing the old machinery by the new one.
- Competition with Khandsari and Gur: Khandsari and gur have been manufactured in rural India much before the advent of sugar industry in the organized sector. Since khandsari industry is free from excise duty, it can offer higher prices of cane to the cane growers.In India about one-third of the sugar cane production is utilised for making gur and khandsari. This causes shortage of raw material for the sugar mills
- Regional imbalances in distribution: Over half of sugar mills are located in Maharashtra and Uttar Pradesh and about 60 per cent of the production comes from these two states. On the other hand, there are several states in the north-east, Jammu and Kashmir and Orissa where there is no appreciable growth of this industry. This leads to regional imbalances which have their own implications.
- Low per capita consumption: The per capita annual consumption of sugar in India is low. This result in low market demand and creates problems of sale of sugar.Most of the sugar mills in Uttar Pradesh and Bihar are more than 50 years old.
- Monoculture of sugarcane. lack of crop rotation in some areas, leads to deletion of nutrients in soil and adversely affect cane productivity.
- Post-harvest deterioration in cane quality on account of staling and delayed crushing contributes to low sugar recovery. An irregularity in availability of water is other major issue in cultivation of sugarcane crop.
- Inadequate availability of quality seed of new sugarcane varieties and poor seed replacement rate adversely affect the realization of potential cane yield of varieties.
- Further reduction in yield of sugarcane due to rise in temperature is significant.
- The average yield of sugarcane is around 50 tons/hectare only which is much lesser when compared to other nations such as 70 tons/hectare in Brazil or 100 tons/hectare in Hawaii.
- The technology used by sugar mills is obsolete and old which make sugar mills economically unviable and due to this farmers benefit get affected.
- The small crushing season last only for 4 to 6 months especially in North India due to lesser availability of water or occurrence of frost, etc.
- The political ownership or their large share in cooperative sugar mills cause delays in payment to farmers.
- The corruption due to political ownership further cause higher price and poor productivity in sugar mills.
Problems faced by sugarcane growers:
- The sugarcane growers in India face two types of problems viz.,on the fields andoff the fields, in other words problems occurred during cultivation as well as marketing of sugarcane as follows:
- On the fields: Availability of seeds, fertilizers, pesticides, etc. in sufficient quantity, Fertility of land, Supply of water, Labour, Finance, Fertilizer, Pesticides, Technical guidance, Demand for sugarcane.
- Off the fields:Low rate for sugarcane, Waiting in a long queue, Dishonest in weighing at weigh bridge, Unnecessary deductions in the name of toll, charges, etc., Delay in payment of installments, Shortages of sugarcane buyers
What can be done?
- Taking into consideration, the problems of sugarcane farmers the following suggestions are given to sustainSugarcane cultivation and to improve the economic conditions of sugarcane farmers.
- The Mahatma Gandhi National Rural Employment Guarantee Act has to be grounded strictly during non agriculture season i.e. from April –June.
- In view of huge labour cost, appropriate capital intensive techniques (machinery to plant sugarcane stems, deweeding and harvesting machines) are to be supplied by the government on subsidy basis or 275 made available.
- Farmers who can afford them will purchase. Once they are available in the village, farmers can hire them as they are doing in case of tractors and crushing machines.
- Sugarcane farmers need to be educated on recent techniques of cultivation and Farm Management by government extension department functioning at Mandal level.
- The sugarcane mills are to be strictly instructed to purchase cane immediately after harvest without loss of weight.
- The most important recommendation is, proper review of government policy of MSP.This need to be increase
- Uninterrupted power supply need be ensured at least 8 hours in a day so that necessary irrigation from wells will be possible which affect the output.
- Relation between the sugarcane growers and the factory should be always well knit.
- There should be some systems for providing suitable seeds, fertilizers and pesticides to the member farmers.
- There should be Option for factory’s transportation service.
- There should be new Techniques and Technologies in Sugarcane Cultivation
Step taken by govt. to improve sugarcane Industry
- The Rangarajan Committee (2012) was formed to provide recommendations for regulating the sugar sector. Its main recommendations:
- Sufficient tariffs should be replaced by the removal of quantitative restrictions on sugar exports and imports.The Committee recommended no further outright prohibitions on sugar exports.
- A minimum radial distance of 15 km between any two sugar mills has been prescribed by the central government, which also causes virtual monopoly over a wide area that can give the mills control over farmers. It was recommended by the Committee that the distance standard be checked.
- No limits on the selling of by-products should be imposed and prices should be decided by the market. Policy reform should also be undertaken by States to allow mills to tap bagasse-generated power.
- Remove the regulations on non-levy sugar release. The elimination of these restrictions would boost the sugar mills’ financial health. In turn, this would result in timely payments to farmers and a decrease in cane arrears.
- The Commission for Agricultural Costs and Prices (CACP) proposed, on the basis of the study, a hybrid approach to sugarcane price fixing involving rational and remunerative pricing (FRP).
- The year 2013-14 for the sugar industry was a water-shed. The Central Government took into account the recommendations of C. Rangarajan’s committee on the de-regulation of the sugar sector and agreed to discontinue the scheme of levy obligations on sugar mills manufactured after September 2012 and to abolish the controlled release mechanism for the open market selling of sugar.
- To boost the financial health of sugar mills, increase cash flows, decrease inventory costs and also result in timely payments of cane prices to sugarcane farmers, de-regulation of the sugar sector has been undertaken.
- The Committee’s recommendations on the minimum distance requirements and the adoption of the Cane Price Formula have been left to the State Governments for the adoption and implementation of the recommendations as considered appropriate by them.
- The Union Government has agreed to raise the minimum selling price (MSP) of sugar from Rs. 29 to Rs. 31 for the year 2019-2020 for the benefit of sugar farmers and in order to clear their arrears/cane dues.
In sugarcane cultivation techniques and technologies are changing every day. So it is essential to accept and apply of all these new things during cultivation.Sugar industry and cane farmers both of them should work with cooperation for reciprocal benefits because the benefits are interrelated and progress is correlated. Therefore, the sugar factories must take care of sugarcane growers by providing materials and information when required. In order to improve the relation between the farmers and the factory.
Mains oriented question:
What are problem faced by sugarcane farmer even after so many steps taken by government? Explain in detail. (200 words)