Syllabus: General Studies Paper 1 (World Geography)
Give an account of distribution of sugar industry in India. Also, highlight the problems plaguing the sugar sector.
India is the world’s largest producer of sugarcane and cane sugar and contributes about 8% of the total sugar production in the world. At present, this is the second largest agro-based industry of India after cotton textile industry.
The sugar industry began in India in the early 20th century by the indigo planters in NE UP and Bihar when the demand for indigo declined due to introduction of the synthetic dye.
Factors responsible for distribution of sugar industry
- Distribution of Sugar Industry Sugar industry in India is based on sugarcane, which are a heavy, low value, weight losing and perishable raw material.
- Sugarcane cannot be stored for long as the loss of sucrose content is inevitable.
- Besides, it cannot be transported over long distances because any increase in transportation cost would raise the cost of production and the sugarcane may dry up on the way.
- Hence sugar mills are located in the cane producing areas.
- Also, it is a seasonal industry because of seasonality of raw materials.
- Based on these factors, sugar industry has two major areas of concentration.
- One comprises Uttar Pradesh, Bihar, Haryana and Punjab in the north and the other that of Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh in the south.
- Peninsular India has tropical climate which gives higher yield per unit area as compared to north India.
- The sucrose content is also higher in tropical variety of sugarcane in the south.
- The crushing season is also much longer in the south than in the north. For example, crushing season is of nearly four months only in the north from November to February, whereas it is of nearly 7-8 months in the south where it starts in October and continues till May and June.
Problems faced by the sugar industry in India
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:
- Low yield per hectare 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. For example, India’s yield is only 64.5 tonnes/hectare as compared to 90 tonnes in Java and 121 tonnes in Hawaii.
- 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 phenomena 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.
- One possible method to increase the crushing season is to sow and harvest sugarcane at proper intervals in different areas adjoining the sugar mill. This will increase the duration of supply of sugarcane to sugar mills.
- 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.
- High cost of Production
- High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duty result in high cost of manufacturing. T
- he 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. Production cost can also be reduced through proper utilisation of by- products of the industry.
- For example, bagasse can be used for manufacturing paper pulp, insulating board, plastic, carbon cortex etc. Molasses comprise another important by-product which can be gainfully used for the manufacture of power alcohol.
- This, in its turn, is useful in manufacturing DDT, acetate rayon, polythene, synthetic rubber, plastics, toilet preparations, etc. It can also be utilised for conversion into edible molasses and cattle feed. Press-mud can be used for extracting wax.
- Small and uneconomic size of mills with obsolete machinery.
- Distortion in cropping pattern
- Sugarcane production is water-intensive and is located in water- scare areas like Maharashtra.
- Competition from khandsari and gur
- In India, 10 tonnes of sugar are obtained from 100 tonnes of cane but in case of khandsari only 7 tonnes of sugar are derived.
- The recovery content of gur is only 5 per cent.
- Thus there is a net loss to country by use of cane for khandsari and gur.
- Policy issues
- State governments often announce higher Fair and Remunerative Prices (FRP) for the season, often ignoring market dynamics.
- The mills are required to pay FRP to farmers but are left to market for recovery.
- In times of bumper production, the market price of sugar almost always becomes uneconomic whereas FRP remains higher.
- This leads to delay in payments to farmers.
Given the significance of the industry, there is a need to have collaborative approach among, government, farmers and sugarcane mill owners to find solutions for these issues at earliest. The government has announced relief package that would help improve the liquidity of cash-starved sugar industry, including setting aside a sum of Rs 4,440 crore to boost ethanol production capacity and creating a buffer stock of 3 million tonnes of sugar. The CCEA has also decided to fix the minimum selling price of white/refined sugar at Rs 29 per kg and impose stock holding limits on sugar mills. These measures are expected to bring temporary relief to the industry and farmers.
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