SUGAR EXPORTS - AGRICULTURE
News: With Centre’s approval, sugar exports to resume
What's in the news?
● The
government on Saturday allowed the export of 6 million tonnes of sugar on a
quota basis till May 31, according to a Food Ministry notification.
● As
per the notification, the Ministry has allocated a uniform export quota of
18.23% of the three years average production of the sweetener in operational
sugar seasons.
● Sugar mills can export themselves or through exporters or swap with the domestic sale quota of any other mills, it said. Sugar season runs from October to September.
Sugarcane:
Favorable Conditions:
● Temperature:
Between 21-27°C with hot and humid
climate.
● Rainfall:
Around 75-100 cm.
● Soil
Type: Deep rich loamy soil.
● It can be grown on all varieties of soils ranging from sandy loam to clay loam given these soils should be well drained.
Production:
● Top
Sugarcane Producing States are Uttar Pradesh, Maharashtra, Karnataka, Tamil
Nadu, Bihar.
● India is the second largest producer of sugarcane after Brazil.
Key takeaways:
● 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 the sugar industry.
● Sugarcane has the least water use efficiency ratio and highest water intake among agricultural crops.
North vs South debate in Sugarcane:
● 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 varieties of sugarcane in the south.
● The
crushing season is also much longer in the south than in the north.
● For
example, the 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.
● The
co-operative sugar mills are better managed in the south than in the north.
● Most of the mills in the south are new and are equipped with modern machinery.
Issues in Sugar Production:
● Lower yield of sugarcane
● Short crushing season
● Fluctuating
production trends
● Low
rate of recovery
● High
cost of production
● Small and Uneconomic size
of mills
● Old and obsolete
machinery
● Regional
imbalances in distribution
● Lower
margins have made companies heavily dependent on debt
● Min
Distance Criterion
● Unpaid
dues to Farmers
● Lower
per capita consumption
● FRP
vs SAP
● High Export prices.
Measures taken:
Implementing Rangarajan Committee recommendations:
1. Removing distance norm:
● In
order to increase competition and ensure a better price for farmers, the
Committee recommended that the distance norm be reviewed.
● Removing
the regulation will ensure better prices for farmers and force existing mills
to pay them the cane price.
2. Reviewing revenue sharing policy:
● States
should not declare their own SAP. The pricing shall be done on the basis of
scientific and economically viable principles.
● The
committee suggested that sharing of revenue generated under the sugarcane
supply chain shall be divided on the basis of 70:30 to farmers and mill owners
respectively. This method will be applicable for by products as well.
● The
payment shall be paid to farmers in two installments:
● First
Floor or FRP should be paid to farmers at time of purchase of sugarcane.
● Second,
the balance should be paid after the final price of sugar is decided and sold
by mill.
3. Duties:
Import and export duty should not be more than 10%.
4. Long term agreements: States
should encourage development of market-based long-term contractual
arrangements, and phase out cane reservation areas.
5. Exports and byproducts: No more outright bans on sugar exports. No restrictions on sale of by-products and prices should be market determined.
WAY FORWARD:
1. Price rationalization:
Cane-pricing policies need immediate rationalization and brought in tune with
global practices, for the Indian sugar industry to export the surplus
successfully.
2. Ethanol blending:
● The
new national policy on Biofuels 2018, expands the scope of raw material for
ethanol production by allowing use of Sugarcane Juice.
● Ethanol
production should be promoted. Such diversion will cut oil import bills and
bring profits for the sugar industry. A win–win situation.
● Brazil,
the world’s biggest sugarcane producer, depends on ethanol, and not sugar, as
the main revenue source from sugarcane and blends 27 percent ethanol with
petrol.
● The
new Biofuel Policy 2018 has fixed a target of achieving 20 percent ethanol
blending with petrol by 2025.
3. R&D:
Intense research should be funded for developing high yielding, early maturing,
frost resistant and high sucrose content varieties of sugarcane.
4. Crushing season:
Increase the crushing season by sowing and harvesting sugarcane at proper
intervals in different areas adjoining the sugar mill. This will increase the
duration of supply of sugarcane to sugar mills.
5. Yield: Intense research
is required to increase the sugarcane production in the agricultural field.
6. Production cost:
● Production
cost can 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.
7. Technology:
There is a dire need of Technological upgradation in age old mills to improve
efficiency in production.
8. Export promotion:
Tweaking of policies to boost exports when Domestic consumption is less than
production.
9. Diversification:
Mills should be incentivized to produce more alcohol and its export should be
deregulated. This will improve the economic situation of the mills.
10. SSI:
● More
steps like Sustainable Sugarcane Initiative.
● SSI
provides practical options to farmers for improving the productivity of their
land, water and labour, all at the same time.
● SSI
is a set of practices based on principles for producing ‘More with Less’ in
agriculture.
● Example:
Reducing overall pressure on water resources -- Highly relevant for water
guzzling Sugarcane crop.