India has been known as the original home of sugar and sugarcane. Indian mythology supports the above fact as it contains legends showing the origin of sugarcane. India is the second largest producer of sugarcane next to Brazil. Presently, about 4 million hectares of land is under sugarcane with an average yield of 70 tonnes per hectare. Traditional sweeteners Gur & Khandsari are consumed mostly by the rural population in India.
The Government is following a policy of dual prices through which a specified percentage of total production of each sugar factory is procured as levy sugar at notified prices for distribution through the PDS (public distribution system)
In India the minimum economic size is 2,500 tonnes of cane crushed per day (tpcd) as against Thailand where the aqverage plant size is of 10,000 tpcd. with an average of 1,400 tpcd in this country.Thus, we lose out on the conomies of scale and also the small MES makes efficient use of by-products impossible.
India faces the Problem of
- Mounting losses: The arrears due to the farmers has been on the rise owing to the increase in the cost of production over the years and the 'levy' at control prices of 60% to 70% and recently, even upto 90% output to be sold to Government.
- Old machinery: The sugar mills need to be modernised and the replacement of old machinery is long overdue.
- Low sugar recovery; In India the recovery(extraction) rate is 9 to 10% as against the 13-14% Industry average of sugar producing economies and
- failure to follow a consistent policy: From controlled rates to partial control to total decontrol the government has never followed any consistent policy.
