Sugar: The Bitter Sweet
Published On : 27 Feb 2017
Article Category : Economics and Finance
Mantriji Content Manager
Sugar, one of the most essential ingredient for Indian household, has recently been in the news for Rs 21000 Cr arrears that is being due to cane farmers. India is the 2nd largest producer of sugar after Brazil and also the largest consumer. Sugar industry, which is 2nd biggest agro-base industry and directly effects the living of 2.6million people, is going through a troubled phase and has become an eyesore for the incumbent government.
This year India is expected to produce a record 27MT of sugar i.e. 2% more than the previous year. But it has only exacerbated the issue. The output has increased over the years but the demand for sugar still remains sluggish and thus its price is constantly on the decline. Due to weak demand and increased output sugar inventory has been accruing, so produces are forced to sell sugar at nearly 2/3rd of production cost.
Addressing the issue NCP chief Sharad Power has said “"It is a matter of grave concern that the outstanding unpaid arrears of our sugarcane farmers for 2014-15 sugar seasons alone is over Rs 21,000 crore, the highest ever in the history of the Indian sugar sector,".
The government has recently raised the import duty on sugar from 25% to 40% and also withdrawn the ethanol’s excise duty from next marketing year. But ISMA (Indian Sugar Mill Association) has been constantly demanding the government to create a 2.5MT of buffer stock by purchasing sugar from the producers. They are of the view that it will help to curb the problem of pending arrears and farmers will receive their undue amount.
This may be necessary for tackling the present concern but for long term it cannot be a permanent solution. The sugarcane farmers needs to realize the importance of seasonality and should try to grow different crops on their farms till the issue has been solved. If practice of crop rotation is followed then it will, in addition to arresting the problem of overproduction, help in replenishing soil nutrients. We can only hope that this problem can be solved as soon as possible and our sugar farmers, who provide us with this wonderful sweetener, don’t have to live a bitter life.
The economic times
Tags : Bitter Sweet