ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Sugar: Inappropriate Remedies

Inappropriate Remedies Euphoria over the record sugar production of 20 mn tonnes in the crop year 2002-03 must be tempered by concern at the widespread sickness in the industry. Over a third of the sugar mills in the public and private sectors, and almost 40 per cent in the cooperative sector, are classified as sick. Although there are interstate variations in the extent of sickness and its causes, shortage of cane has been a common factor. A key reason for the non-availability of cane is that sugar mills are installed in close proximity. The reduction of the distance criterion between two sugar units from 25 km to 15 km and the delicensing of the sugar industry saw a large number of units spring up, creating problems of allotment of cane area. The proliferation of mills has added volume output in an existing scenario of strong production over the past few years. This has created a huge stockpile of sugar produced at high cost. Moreover, of the nearly 500 operational sugar mills in India, only a fifth have installed capacities of at least 2,500 tonnes of cane crushed per day, which is estimated to be the base viability requirement. In Maharashtra, where 90 per cent of the sugar mills are in the cooperative sector, only 33 of the 56 sick units meet this capacity norm. Mills in some states, such as Uttar Pradesh and Punjab, are crippled by arbitrary state-advised cane prices (apart from the curse of annual increase in statutory minimum price, which affects all mills), whereas those in Bihar are simply inefficient. Stagnant levels of sucrose content in cane, along with technological obsolescence compounded by inept operations in many mills have resulted in low sugar recovery rates, while pushing up the cost of production.

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