The Indian sugar industry holds significant economic importance, directly influencing the livelihood of approximately 50 million sugarcane farmers and providing direct employment to about 5 lakh workers in sugar mills. India has emerged as both the world’s largest producer and consumer of sugar, as well as the second-largest exporter. This growth can be attributed to several factors, including favorable geographical conditions, government policy initiatives, and advancements in technology.
Present Status of the Sugar Industry in India
The sugar industry is an important agro-based industry that contributes significantly towards the rural economy of India. In the 2021-22 marketing year, India became the world’s largest producer and consumer of sugar, and the second-largest exporter. Predominant sugarcane-producing states include Maharashtra, Uttar Pradesh, and Karnataka.
Growth Drivers for Sugar Industries
Several factors have contributed to the impressive growth of the Indian sugar industry. The 2021-22 sugar season (Sep-Oct) witnessed record-breaking numbers in terms of sugarcane production, sugar production, sugar exports, cane procurement, cane dues paid, and ethanol production. The exports reached a staggering high of around 109.8 LMT without any financial assistance, bringing in foreign currency of about Rs. 40,000 crores. Government policy initiatives over the last 5 years contributed significantly to this growth, rescuing the sugar mills from financial distress and leading them towards self-sufficiency.
Government Initiatives for Encouraging Ethanol Production
In an effort to improve the financial stability of sugar mills, the Indian government has encouraged sugar mills to divert sugar to ethanol and export surplus sugar. These measures are part of the Ethanol Blended Petrol (EBP) Programme, which aims to achieve an indicative target of 20% ethanol blending by 2025. The Fair and Remunerative Price (FRP), determined by the Commission for Agricultural Costs and Prices (CACP) after consultation with State Governments and other stakeholders, ensures that sugar mills pay sugarcane farmers a minimum price for procurement.
Challenges Faced by the Sugar Industry
Despite its growth, the Indian sugar industry faces several challenges. Increasing competition from other sweeteners such as high fructose corn syrup, outdated technology in many sugar mills, and negative environmental impacts of sugarcane cultivation are among the major issues. In addition, political interference often leads to lack of transparency and inefficiency in the industry.
The Role of Indian Sugar Mills Association (ISMA)
The Indian Sugar Mills Association (ISMA) serves as the bridge between the government and the sugar industry. It aims to safeguard the interests of both private and public sugar mills through the implementation of conducive and growth-oriented government policies.
Technological Solutions and Diversification as Potential Remedies
One way forward for the industry involves the deployment of remote sensing technologies to map sugarcane areas. Diversifying operations to other products such as biofuels and organic sugar could also help to mitigate risks associated with sugar price fluctuations. Further investment in research and development could enhance crop yields and reduce the environmental impact of sugar production.
Promoting Sustainable Practices
To mitigate the harm caused by sugar production on the environment, it is crucial that the industry encourages sustainable practices. Water conservation, integrated pest management, and the reduction of pesticide use are a few examples of how this can be achieved.
Examination Questions
A previous question from the UPSC Civil Services Examination asked: According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? Cassava, Damaged wheat grains, Groundnut seeds, Horse gram, Rotten potatoes, Sugar beet. The correct answer was: 1, 2, 5 and 6 only.
