The Hindu Editorial Analysis- 31st July 2023 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Bitter truths in Maharashtra’s sugar fields

Why in News?

The High Court of Bombay has recently taken suo motu cognisance of the exploitation of the intra-State workforce that migrates seasonally from the drought-affected and water-scarce regions of Marathwada to the sugar-belt region of western Maharashtra. Maharashtra is one of the top sugar producers in India. According to the Maharashtra Sugar Commissioner, in 2022-23, the net area under sugar cane was 1.487 million hectares, and there were 203 crushing factories in the State that were expected to produce 138 lakh metric tons of sugar.

• Abundant Supply of Water:
  • Sugarcane is a water intensive crop which needs a huge water supply which farmers from Maharashtra were getting properly through rainfall, water reservoirs, network of canals and from groundwater.
  • Maharashtra has been receiving more than sufficient rainwater since 2019 during the south-west monsoon season.
  • Groundwater aquifers and other reservoirs were filled by water due to sufficient rainfall. These sources of water play a key role in agricultural production.
• Underreporting of Cane Production:
  • Data regarding actual production of the sugarcane in the state of Maharashtra was not quite accurate.
  • Keeping this in mind the concerned administration tried to make corrections in the recorded data of the sugarcane production.
  • This ultimately resulted in increased acreage under the sugarcane production from 11.42 lakh hectare to 12.4 lakh hectares.
  • Thus, Maharashtra harnessed the benefits from increased acreage under sugarcane in 2021-22.

Why did Sugar Production in Uttar Pradesh Decline?

• Uttar Pradesh has become the largest ethanol producer because a large amount of sugarcane production in Uttar Pradesh diverted toward the production of ethanol.
• It has been estimated that 12.60 lakh tonnes equivalent of sugar from cane have been diverted for making ethanol in the year 2021-22 compared to 7.19 lakh tonnes in 2020-21 and 4.81 lakh tonnes in 2019-20 and 0.31 lakh tonnes in 2018-19.
• Uttar Pradesh also has achieved the highest blending of ethanol in petrol ratio among all states.
• Excess rain with water logging problems are associated with the state of Uttar Pradesh which incurred heavy loss of sugarcane crops.
• Majority of the land in sugarcane area in Uttar Pradesh(87%) is planted under a single variety of sugarcane (Co-0238). This variety is not a high yield variety of the sugarcane.
• Adverse impact of red rot fungal disease on sugarcane crop is a severe cause for the decline of sugarcane production in Uttar Pradesh.
• Co-0238 variety of the sugarcane is highly susceptible to the red rot fungal diseases.
• It should be replaced by the new varieties, such as Co-0118 and Co-15023 because both of them are resistant to red rot fungal disease.

Sugarcane

• Temperature: Between 21-27°C with hot and humid climate.
• Rainfall: Around 100-150 cm.
• Soil Type: Deep rich loamy soil.
• Top Sugarcane Producing States: Uttar Pradesh > Maharashtra > Karnataka > Tamil Nadu > Bihar.
• India is the second largest producer of sugarcane after Brazil.
• It can be grown on all varieties of soils ranging from sandy loam to clay loam given these soils should be well drained.
• It needs manual labour from sowing to harvesting.
• It is the main source of sugar, gur (jaggery), khandsari and molasses.
• Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) and National Policy on Biofuels are two of the government initiatives to support sugarcane production and sugar industry.

Ethanol Blending:

• Ethanol: It is one of the principal biofuels, which is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
• Ethanol Blending Programme (EBP): It is aimed at reducing the country’s dependence on crude oil imports, cutting carbon emissions and boosting farmers’ incomes.
• Blending Target: The Government of India has advanced the target for 20% ethanol blending in petrol (also called E20) to 2025 from 2030.

Problems of Sugar Industry:

• Sugar industry in India is plagued with several serious and complicated problems which call for immediate attention and rational solutions. Some of the burning problems are briefly described as under:

• 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.
• For example, India’s yield is only 64.5 tones/hectare as compared to 90 tonnes in Java and 121 tonnes in Hawaii.
• This leads to low overall production compared to capacity or potential.

• 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.

• 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.

• The average rate of recovery in India is less than ten per cent which is quite low as compared to other major sugar producing countries.
• For example recovery rate is as high as 14-16 per cent in Java, Hawaii and Australia.

• 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.

• Most of the sugar mills in India are of small size with a capacity of 1,000 to 1,500 tonnes per day.
• This makes large scale production uneconomic. Many of the mills are economically not viable.

• 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. 

• Khandsari and gur have been manufactured in rural India much before the advent of sugar industry in the organised sector.
• Since khandsari industry is free from excise duty, it can offer higher prices of cane to the cane growers.
• Further, cane growers themselves use cane for manufacturing gur and save on labour cost which is not possible in sugar industry.
• It is estimated that about 60 per cent of the cane grown in India is used for making khandsari and gur and the organised sugar industry is deprived of sufficient supply of this basic raw material.

• 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.

• The per capita annual consumption of sugar in India is only 3 kg as against 48.8 kg in the USA., 53.6 kg in U.K., 57.1 kg in Australia and 78.2 kg in Cuba.
• The world average of about 21.1 kg. This result in low market demand and creates problems of sale of sugar.

• The central government declares a min price of sugarcane that called Fair Remunerative Price (FRP) and state

Governments have also right to declare their own price which is called State Advisory Price (SAP).

Generally SAP is more than FRP which pose the conflict that which is fair price for both farmers and mills.

• According to the Indian Sugar Mills Association, the FRP of sugarcane rose 50.9% from Rs 139.12 per quintal in 2010-11 to Rs 210 per quintal in 2013-14.
• However, sugar prices fell 21% from Rs 3,765 per quintal in January 2010 to Rs 2,962 per quintal in August 2014.
• Lower margins have made companies heavily dependent on debt.

• To ensure decent supply of sugarcane to each sugar mill, the central government has prescribed a minimum radial distance of 15 km between any two sugar mills.
• But this criterion help to create the monopoly of mill owner over a large area as 15 km radial distance is large in number and ultimately led to exploitation of farmers especially where landholding is smaller.
• Also this regulation prohibits innovation and investment by entrepreneurs.

• India’s sugarcane dues accruing to farmers have remained stubbornly high despite. The sugarcane growers are being exploited by not paying their due arrears.
• For instance, in Uttar Pradesh, sugarcane farmers have not been paid for 20200. Further they get ‘zero price’ receipts for 2021.

• Exporting the surplus from India is not easy because of the burden of very high cost of sugarcane, pushing up the costs of sugar.
• For a comparison, Indian cane prices are 70-80% higher than that in Brazil.