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India’s sugarcane acreage this year is up two per cent so far from the year-ago period as sowing has been completed on over 98 per cent of the normal area of 47.53 lakh hectares (lh). This will likely help the country’s sugar output touch a new record during 2022-23 season (October-September).
“First of all, sugarcane is as lucrative as no other crop matches that level if a farmer has assured irrigation around 15-20 km of a sugar mill because of its assured price guarantee system. Secondly, many farmers have received their cane dues from the mills this season in time or earlier than previous years when mounting arrears used to cause sleepless nights for governments,” said an industry expert.
The cane sowing in both Maharashtra and Uttar Pradesh, the top two producers of sugar, is higher this year while it is a notch below last year level in Karnataka, the third biggest producer.
Tamil Nadu has reported sowing on 1.45 lh as on June 2 against 1.46 lh year-ago. Bihar has seen planting on 2.30 lh (2.38 lh), Gujarat 2.32 lh (2.31 lh), and Haryana on 1.06 lh (0.94 lh), according to official data.
The all-India area coverage was 46.67 lh as of June 2 compared with 45.81 lh in the corresponding period last year, which is 1.88 per cent higher. The current cane area coverage has reached 85 per cent of last year’s total acreage (54.97 lh) in the entire crop season (July-June). This resulted in a record sugarcane production of 430.5 million tonnes (mt) and a sugar output of 35.5 mt.
FRP recommendations
“The planting will get a leg up after the government declares the cane price for the farmers which is expected in the next Cabinet meet,” said an industry official. As reported by BusinessLine on April 4, the Commission for Agricultural Costs and Prices (CACP) has recommended the Centre to fix the fair and remunerative price (FRP) of sugarcane at ₹305/quintal at a 10.25 per cent recovery rate for 2022-23 season, which is a meagre 2.5 per cent increase from ₹290 at 10 per cent recovery rate for current season.
Recovery rate is the quantum of sugar produced out of sugarcane that depends on the juice content.
According to Food Ministry data, sugarcane farmers have already received ₹92,447 crore from mills which is 84.60 per cent of total dues of ₹1,09,283 crore payable during 2021-22 season. Cane arrears issue used to be a constant problem for ruling parties as mills defaulted to clear payment within stipulated 14 days and kept delaying for months.
However, a policy shift towards ethanol and fixation of minimum selling price of sugar, helped mills to improve their financial conditions and the country’s exports have crossed 7 mt in the current season without subsidy.
Since 2014, more than ₹53,000 crore revenue generated by sugar mills from sale of ethanol to oil marketing companies (OMCs) helped in making timely payment of dues of farmers, an official said. Supply of ethanol to OMCs has increased from 38 crore litres in 2013-14 to 302 crore litres in 2020-21, resulting in the blending level reaching 8.1 per cent.
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