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Distribution of Sugar Industry in India: The Issue and the Solution

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

  1. Based on Webber’s Theory of Transportation, a weight loss crop has an industry located near to its cultivation.
  2. North India – According to the 73rd NSSO report, Uttar Pradesh is the largest producer of sugarcane.
  3. Bihar, Bengal, and parts of Western Madhya Pradesh also require a 21-27 degree celsius tropical climate and 100-150cm of rainfall.
  4. There is cultivation in few areas of Punjab and Haryana owing to the irrigation facilities like groundwater.
  5. 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
Map of Distribution of Sugar Industry in India
Map: Distribution of Sugar Industry in India


Problems of Sugar Industry in India:

  1. Low yield of Sugarcane – As compared to some of the major sugarcane producing countries of the world the yield per hectare is extremely low.
  2. 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.
  3. The high cost of production
  4. Inefficient technology
  5. Regional imbalances in the distribution – the majority of sugar mills are located in UP and Maharashtra.
  6. The arrears and pending payments (debts) of the mill owners towards the farmers.
  7. The Compulsory Jute packaging Rules mandating 20% of the sugar packaging.
  8. The SAP (State Advised Price) and FRP (Fair and Remunerative Price) on the sugarcane see wide differences.
  9. Government interference and regulation at all levels
  10. Heavy Excise duty on the molasses and 20% export duty on sugar
  11. 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.

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