LUCKNOW: Sugarcane tastes no more juicy for UP, which is fast hurtling towards a precarious balance of its supply and demand. The emerging picture is of gloom in which the state may fast slip from its prestigious position of a sugar-surplus state into a sugar-deficient state. The cause of worry comes from a sharp decline in the sugarcane production over the years. Sources within the government admit that the area under cane cultivation has gone down to from 28.5 lakh hectares in 2007-08 to 21.40 lakh hectares in 2008-09. This is likely to reduce further.
Reason for this is the ham-handed approach of the government towards cane growers, who are left exploited despite tall promises made for their welfare. They are not paid their dues in time and the return of their produce is much less as compared to that to their cost. This is why nearly 30 per cent of around 40 lakh cane growers have switched over to other crops like paddy, which have become more lucrative due to high remunerative prices fixed by the Centre.
In the face of this, the sugarcane yield is expected to go down substantially. Currently, the sugar production has also come down to 41 lakh metric tons, as against that of 84.75 lakh MT produced in 2006-07. With this, UP will not only lose its status as sugar-surplus state, but also be left far behind Maharashtra, which has produced around 90 lakh MT this year.
The shortfall of sugarcane has already resulted in price hike of sugar, which is now sold between Rs 26 and Rs 28 a kg in the open market. This was sold earlier between Rs 15 and Rs 20 a kg a year ago.
What makes the situation complicated is that the sugar sector is under strain throughout the country. The sugar stock of the country is said to be 165 lakh MT as against the requirement of 220 lakh MT. Of it, 80 lakh MT are mandatorily needed for a buffer stock. Thus, there are two options: either to release sugar from the buffer stock or go for import. But import would be difficult proposition, as sugar is imported in the raw form. In order to make it usable, its processing takes three months.
As for UP, the decline of sugar sector is of far reaching consequences. Apart from a shortage of sugar, there will be an acute shortage of molasses and bagass. These are by-products of sugar mills, which are used as raw materials by distilleries for manufacturing industrial alcohol as well as liquor and running captive power plants for thermal power generation. The worst-affected will be distilleries, which might face acute shortage of molasses. Though the government has already imposed 50 per cent levy on the total production of molasses, earmarking it for distilleries, still there seems to be no respite from its scarcity, said an official. There are around 40 distilleries in the state.
On the other hand, the government's plan to produce 1,200 MW electricity through captive thermal power plants fed on bagass, is also likely to be adversely affected. The single biggest factor responsible for this is the drastic fall in the production of sugarcane this year.
- Arvind Singh Bisht
Economic Times
7 Jun 2009
