The Hindu Business Line : AP farmers cut area under sugarcane

After the bitter experience last year when thousands of tonnes of sugarcane were left uncrushed, farmers in Andhra Pradesh have significantly cut down on the area from 2.60 lakh hectares in 2006-07 to 2.10 lakh hectares this year.

Tempted by good prices in the global market three years ago, the farmers, like their peers in other States had increased the acreage. Sugar price, which was hovering at Rs 23 a kg in 2004-05, fell to Rs 15, with huge stocks of sugar piling up, far more than the country’s requirement.

The sugar factories in the State crushed 180 lakh tonnes of cane as against the tied-up or agreed 150 lt. This resulted in burning of the standing crop in several places, while other areas witnessed steep drop in ‘recovery’ rates.

Grim situtaion

The farmers in several parts are still to get an amount of Rs 80 crore from the private factories. The situation is better off in the cooperative sector, with the Government negotiating a Rs 62-crore loan from the Andhra Pradesh State Cooperative Bank to clear the dues.

Last year’s crisis even led to suicides by farmers, which is unheard of in the sugar sector. “We have told the farmers that the crisis would continue and not to go for sugarcane,” Mr Vidyasagar, Commissioner for Sugar, told Business Line.

Though the acreage has come down for the year, a dip in production is unlikely, with farmers going for better management practices and high-yielding varieties.

It is not just the farmers, even the sugar factories are finding it tough with the market situation turning hostile.

Other options

A solution for the problem, he feels, could be making the factories, particularly in the cooperative sector, to seriously look at tapping other revenue-generating options of sugar cane.

A high-level meeting had been organised by the Centre to discuss the issues that dogged the sugar sector. Some of the important proposals were removing tax barriers on ethanol by States, increasing the ethanol blend (in fuels) etc.

Andhra Pradesh said it was ready to forego the four per cent VAT on ethanol, with a view to encouraging production by sugar factories. All that they would need is to obtain a no-objection certificate by the Prohibition and Excise Department.