The Hindu Business Line : Sugar mills woo farmers to grow more cane — Offer free urea, subsidy on insecticides

THE last 2-3 crushing seasons (October-September) have been dreadful for the sugarcane farming community, with factories owing them huge sums even against past supplies. But this situation, it seems, is now passé.

Suddenly, the growers, who were being chided for cultivating cane much in excess of what mills could viably crush, have become the most sought-afterlot. Sugarcane, as a prominent mill-owner puts it, is today "as precious as gold."

In Uttar Pradesh — the country's biggest sugarcane producer and the second largest in sugar, after Maharashtra — factories are virtually beseeching growers to cultivate the crop. According to Mr C.B. Patodia, Advisor to the KK Birla Group of Sugar Industries, most mills are providing one bag of urea free per acre and also 50 per cent subsidy on insecticides. "We are also arranging transport for the seed cane to be planted this time," he added.

Currently, planting is still on in the main cane belt of western and central UP, while it is more-or-less completed in the eastern parts. The seed cane that is being planted now would be ready for harvest in 9-10 months time, i.e February-March. The cane that would go for crushing at the start of the 2004-05 crushing season from October is basically the rattoon, which is the crop springing from the root of the previous year's seed cane harvested this February-March. "We want to ensure maximum possible area and yield for the crop so that there is enough cane available for crushing in the coming 2004-05 season," Mr Patodia said.

The reasons for the mills' new-found enthusiasm is not hard to see. Sugar prices are now on a roll, with present ex-factory realisations, at around Rs 1,400 per quintal, being a good Rs 300-350 higher than the prevailing levels last year. But the problem is the lack of adequate cane that can be crushed. An indication of the desperation of factories is that there are no sizeable cane arrears this time and most factories have made payments for supplies made up to March 15 at the Centre's Statutory Minimum Price (SMP) of Rs 73 per quintal, linked to a basic 8.5 per cent sugar recovery.

What is more, there are many — including Uttam Sugars in Liberheri (Uttaranchal), Venus Sugar in Chandausi (Muzaffarnagar, UP), Kamlapur Sugar in Sitapur and Daya Sugar in Gagalheri (Saharanpur) — who are shelling out Rs 100-105, which is more than the Rs 95 price `advised' by the State Government, let alone the Centre's SMP!

During the ongoing 2003-04 season, mills in UP are expected to crush only around 500 lakh tonnes (lt) of cane against 593 lt in the preceding season, with sugar production, too, correspondingly slated to fall from 56.51 lt to 47-48 lt. The situation is worse in Maharashtra, Tamil Nadu and most other cane growing areas of peninsular India, which are experiencing severe drought conditions.

During the 2002-03 season, factories in Maharashtra crushed 534.41 lt of cane that produced 62.19 lt of sugar. In the current season, crushing is not expected to cross 280 lt, with sugar output falling to about 31 lt. What is worse, hardly any planting of cane has taken place for harvesting in the ensuring 2004-05 season, which "will result in a further dip in sugar production to 16-17 lt," said an official from the Maharashtra State Federation of Cooperative Sugar Factories.

The same is the case in Tamil Nadu, where the total quantity of cane crushed in the current season is expected to fall to 110-120 lt, from 166 lt in 2002-03, with sugar production, too, likely to fall from 16.44 lt to below 10 lt. "Even if we have a good monsoon this year, the impact of it will be felt only in the 2005-06 season," Mr R. Varadaraj, Chief Operating Officer of the Coimbatore-based Rajshree Sugars & Chemicals Ltd pointed out.