Importance of the Sugar Industry

Importance of the Sugar Industry:

The sugar produced in India is more than our domestic demand and is exported thereby contributing to our forex reserves and helping in growing our GDP. This industry is responsible for directly employing nearly 5 crores of farmers and providing indirect employment to many more.  Sugar is not the only product created from processing sugar cane. The other by-products of this process are molasses and bagasse.These are used input for biofuel which is a cleaner and better option at a time when the world is facing climate change due to high consumption of fuel among other reasons. Molasses is also used as cattle feed. Bagasse can also be used as raw material for the paper industry....

Geographic Spread of the Sugar Industry:

In India sugarcane is grown in two different regions. In northern India, it is grown in the doab and terai region which covers the states of UP, Bihar, Haryana, and Punjab. UP is the largest producer of sugarcane in northern India....

Challenges of the Sugar Industry:

Sugarcane is one of many cash crops. This means that farmers often have to choose between which crops to grow leading to volatility regarding how much sugarcane is produced every year. The output of sugarcane per hectare in India is low compared to the global average. The conversion rate of sugar from sugarcane is very low. This coupled with the previous point means that the costs of producing sugar in India are comparatively higher than they should be. Since the mills have to be close to the farm and no one can be sure how much is being produced most mills are small. This means that they cannot reap the benefits of economies of scale. We have already seen that inefficient technology is responsible for lower production than is possible, but this also raises the costs involved. Since it is a seasonal crop it also leads to seasonal unemployment as farmers are idle for many months and sugar mills are also waiting for the fresh crop. Like most cash crops, sugarcane too is an intensive crop. It requires a lot of water and continuous cultivation in an area can degrade the quality of the land. Government policies have also played a critical role in this industry regulating export, prices, and the location of sugar mills as well....

Solutions of Sugar Related Issues:

The government set up a committee in 2012 under Dr. C Rangarajan to make recommendations regarding the deregulation of the sugar industry. Some of the major recommendations were:...