In recent times, India has distinguished itself as the world’s largest producer and consumer of sugar. The country has also claimed its position as the world’s 2nd largest exporter of this sweet substance. This achievement is owed to a record production of over 5000 Lakh Metric Tons (LMT) of sugarcane. This article delves into the factors contributing to this success, the policies in place, and the current state of the sugar industry in India.
The Factors Fuelling High Sugar Production
Several factors have contributed to this momentous output. To begin with, the impressive 2021 Sugar Season (September-October) broke all previous records of sugarcane production, sugar production, sugar exports, cane procurement, cane dues paid, and ethanol production.
Moreover, exports were at their highest, reaching approximately 109.8 LMT without the need for financial assistance. This export activity brought in foreign currency to the tune of Rs. 40,000 crores.
The Role of Government Policy
The government’s policy initiatives in the last five years have played a significant role in boosting sugar production. From financial distress in 2018-19, these interventions have propelled sugar mills to a stage of self-sufficiency in 2021-22.
One such initiative is the Ethanol Blending with Petrol (EBP) Programme. This programme, under the National Policy on Biofuels 2018, targets a 20% ethanol blend by 2025. It has encouraged sugar mills to divert sugar to ethanol and export surplus sugar, enhancing their financial situation.
Sugarcane Pricing Policies
The Fair and remunerative price (FRP) is another crucial policy that supports sugarcane farmers. The FRP ensures a minimum price that sugar mills have to pay for procurement of sugarcane. The Commission for Agricultural Costs and Prices (CACP) recommends this price after consultation with State Governments and other stakeholders.
In addition to the FRP, state governments can set a State Advised Price, which a sugar mill must pay to the farmers.
Regulation of the Sugar Industry
The Rangarajan committee (2012) was established to suggest regulations for the sugar industry. The committee advised abolishing the quantitative controls on sugar exports and imports and replacing them with appropriate tariffs. It also suggested policy reform to allow mills to harness power generated from bagasse.
The Current State of the Sugar Industry in India
The sugar industry affects the livelihoods of roughly 50 million sugarcane farmers and about 500,000 directly employed workers. It is second only to cotton in India’s agro-based industries.
The industry is concentrated in Uttar Pradesh, Bihar, Haryana, and Punjab in the north and Maharashtra, Karnataka, Tamil Nadu, and Andhra Pradesh in the south. South India’s tropical climate favours higher sucrose content, leading to higher yield per unit area than north India.
Challenges and Possible Solutions
Despite these advantages, the industry faces some challenges. Uncertain production output, low yields per hectare, short crushing seasons, low sugar recovery rates, high production costs, and small scale operations are among these challenges.
Addressing these issues requires innovative solutions. Remote sensing technologies can be used to map sugarcane areas, while research and development can help tackle issues like low yields and low sugar recovery rates.
The Importance of Biofuels
India’s National Policy on Biofuels highlights the importance of biofuels in the country’s energy mix. According to the policy, ethanol can be produced from damaged food grains unfit for human consumption, surplus food grains, and sugar-containing materials like sugarcane juice and sugar beet. The policy underscores the potential of biofuels as a renewable source of energy and a tool for boosting agricultural economies.
