Improved relationship between farmers and mill-owners can boost sugar output

Improved relationship between farmers and mill-owners can boost sugar output
Alka Pande

THE crisis of sugarcane in the north Indian state of Uttar Pradesh, in the current season, has forced the sugar mills as well as the government authorities to contemplate on ways and measures for enhancing the production of sugarcane crop as well as sugar, in the state.

All stake holders including the farmers, sugar mill owners and the government are united on two major issues - improving the relationship between the farmers and the sugar mills besides timely announcement and payment of sugarcane price by government and sugar mills, respectively.

The discussions had been on for long in the state that the government should announce the State Advisory Price (SAP) before the sowing of the crop so that to encourage the farmers to take to sugarcane cultivation. However, the state – which is known to have the largest sugarcane growing area in India - has the tradition of announcing the SAP just before the crushing season.

"Now the government needs to review how this tradition can be changed," admits the Uttar Pradesh Cane Commissioner Sudhir M Bobde. Highlighting the need for correct pricing by the government and timely payment by the mills, Bobde also points out the need for the government to strike a balance between the sugarcane farmers and mills. He even mentions the shortcomings in the slip system being followed by the sugar mills for payment to farmers and also raises the issue of inappropriate weighing of the farmers’ produce by the sugar mills, besides unnecessary waiting caused to farmers, which reduces the sugar recovery from the sugarcane.

This was perhaps for the first time any government official raised such sensitive issues on a public platform. Bobde was speaking at a seminar "Sugar Tech 2009: Shorter Seasons in Sugar Industry – Opportunities & Challenges." The event was organised by the Confederation of Indian Industries (CII) UP State Council in association with National Sugar Institute, Kanpur and Indian Institute of Technology, Roorkee. The seminar aimed at reviewing the substantial fall in the production of sugar in the state, besides assessing the challenges and opportunities in order to arrive at a meaningful solution to benefit the farmers, industry and the Government alike.

The Cane Commissioner was of the opinion that the government is required to make a long-term roadmap for sugar industry in the state as it is not sugar production alone which gets affected due to lack of proper policies, the industry also affects alcohol industry, which is a major revenue generation sector for the state government.

Bobde pointed out that increase of sugar price leads to a price hike for molasses that is used for making alcohol, which consequently increases the duty on alcohol and thereby reduces its price competency in the alcohol market of the country.

For records, the area for sugarcane has decreased by 16.48 percent in last one year and this year the availability of sugarcane is expected to be around 98 million tonnes of which 40 to 42 percent is feared to go to Khandsari and Jaggery units. The drawl for the sugar mills is estimated to be around 45 percent. The challenge before the government is to increase this drawl. Besides, the stake holders are also united on the issue of shrinking crushing season in the state. Crushing season – which used to be of 150 to 180 days – is now reduced to merely 90 – 120 days for two consecutive years.

On the occasion the government and the sugar mill owners raised their concern over sugarcane diversion to Khandsari and jaggery units. Director, National Sugar Institute, Government of India, SK Mitra advocated that the diversion of cane for jaggery and khandsari units should be discouraged. He said that recovery was another factor, which can increase the sugar production by at least 0.5% at all India level.

The Chief Secretary of Uttar Pradesh Atul Kumar Gupta who was also present at the seminar said that the installed capacity of sugar had though gone up this year, the production had gone down by nearly 11 percent. He cited various reasons for the same which included higher prices of competing crop, non-payment or delayed payment, litigation cases and better prices of ‘gur’ and ‘khandsari’. He advised that the mills should have a long-term relationship with the farmers whose interest was of primary importance, hence a loyalty bonus system or fixed cane price for two years could be introduced.

On the occasion, Jayant Krishna,the Vice Chairman of Confederation of Indian Industry (CII) UP State Council presented a UP Sugar Vision 2015, which was based on the day-long deliberations. The salient features of this Sugar Vision 2015 included --:

* Sugarcane farmers and sugar mills should pursue a long-term win-win partnership and operate on a platform of mutual trust by 2015.

* The farmers of Uttar Pradesh should adopt better seed varieties and farm practices while the sugar units should embrace technological innovations to ensure a 10-15 percent increase in recovery by 2015.

* All major producers should become integrated players with at least 10,000 tonnes of daily crushing units along with alcohol production and co-generation of electricity by 2015

* Uttar Pradesh should become a significant player in global sugar market by 2015.

* Uttar Pradesh should account for two-thirds of the national sugar production by 2015.

Alka Pande
(The author is a senior journalist)

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