The sugar industry in India is a highly developed agricultural-based industry with a customer base of billions of people. India is also the world’s second-largest producer of sugar, behind only Brazil. Sugarcane is a tropically grown crop that is widely grown in India.
Distribution of Sugar Industry in India
- Based on Webber’s Theory of Transportation, a weight loss crop has an industry located near to its cultivation.
- North India – According to the 73rd NSSO report, Uttar Pradesh is the largest producer of sugarcane.
- Bihar, Bengal, and parts of Western Madhya Pradesh also require a 21-27 degree celsius tropical climate and 100-150cm of rainfall.
- There is cultivation in few areas of Punjab and Haryana owing to the irrigation facilities like groundwater.
- South India – Sugar Industry has witnessed a shift from North to South India due to the following factors:
- Availability of Rains (coastal regions)
- The moderating climate facilitates all-year cultivation.
- Presence of Farmer Producer Organisation (FPOs) and the cooperative culture in the south leading to large tracts of land under cultivation.
- Penetration of technology
Problems of Sugar Industry in India:
- Low yield of Sugarcane – As compared to some of the major sugarcane producing countries of the world the yield per hectare is extremely low.
- Short crushing Season – varying normally from 4-7 months in a year. The mill and its worker remain idle for the remaining period creating financial problems.
- The high cost of production
- Inefficient technology
- Regional imbalances in the distribution – the majority of sugar mills are located in UP and Maharashtra.
- The arrears and pending payments (debts) of the mill owners towards the farmers.
- The Compulsory Jute packaging Rules mandating 20% of the sugar packaging.
- The SAP (State Advised Price) and FRP (Fair and Remunerative Price) on the sugarcane see wide differences.
- Government interference and regulation at all levels
- Heavy Excise duty on the molasses and 20% export duty on sugar
- Decline in the area due to competition from local khandsari and jaggery.
Rangarajan Panel had advised rationalizing cane reservation area and minimum distance area to boost the production.