nabard sugarcane report 2010

8/6/2019 Nabard Sugarcane Report 2010

1/200


2/200

DeeefLe& ke efJeMues


3/200

uesKekeSme.Deej.Sme. cetleea

HesHej ceW efoS leLeeW Deewj Jekele efJeeejeW kes efueS veeyee[& Gejoeeer veneRnw~The usual disclaimer about the responsibility of the National Bank for Agriculture and

Rural Development as to the facts cited and views expressed in the paper is implied.

je^ere ke=ef


4/200

Title Page No.

Foreword .......................................................................... iv

Abbreviations ................................................................. viii

Executive Summary .........................................................xi

The Main Report ................................................................

Chapter 1 Introduction ..................................................................... 1

Chapter 2 Objectives and Methodology ............................................. 8

Chapter 3 Sugarcane, Sugar, Jaggery and Khandsari - Production

Aspects............................................................................14

Chapter 4 Trends in Area, Production and Productivity...................31

Chapter 5 Economics of Sugarcane Production ...............................41

Chapter 6 Economics of Sugar, Jaggery and Khandsari Production 60

Chapter 7 Forward and Backward Linkages ....................................80

Chapter 8 Financing of Production ..................................................97

Chapter 9 Marketing Aspects .........................................................113

Chapter 10 Exports and Imports .....................................................139

Chapter 11 Demand and Supply Aspects ........................................143

Chapter 12 Constraints in the Supply Chain and

Recommendations .........................................................146

References.....................................................................166

Annexure I ....................................................................168

CONTENTS

iii


5/200

iv

Foreword

The Indian sugar industry is the second largest agro-based industry,next only to textiles and contributes about Rs.1650 crore to the centralexchequer as excise duty and taxes annually. Besides, the state

governments realise about Rs.600 crore annually through purchasetaxes, cess, etc. The sugar industry in India plays a vital role towardssocio-economic development in the rural areas by mobilising ruralresources and generating higher income and employmentopportunities. About 7.5 per cent of the rural population, coveringabout 45 million sugarcane farmers, their dependents and a largenumber of agricultural labourers are involved in sugarcane cultivation,harvesting and ancillary activities. About half a million skilled andunskilled workers, mostly from the rural areas are engaged in thesugar industry.

Sugarcane is the raw material for the production of white sugar,jaggery [gur] and khandsari. Utilisation of sugarcane for white sugarproduction increased from 61 per cent in 2001-02 to 73 per cent in2007-08 and that for gur and khandsari decreased from 28 per centto 15 per cent during the same period. This could be attributed todiversion of utilisation of sugarcane for manufacture of white sugaron account of changed demand pattern.

The sugar industry in India, finds itself entangled in a complexweb of problems leading to "declining profitability to the cane growersas well as sugar industry". The reasons for the same are to be traced

and suitably addressed to give a boost to this sector in the country.Unlike many western or major sugarcane growing countries,sugarcane is the only source of sugar in our country and therefore,any mismatch between demand and supply of sugar in the countryassumes significance at the national level and influences theeconomics of sugarcane cultivation to a great extent. Often, theinitiatives by the state governments in the form of fixing aremunerative sugarcane price on one end and pressurising mills tomake payments within a reasonable time on the other end encouragedfarmers to put in more area under the sugarcane crop. The initiativesof research institutions particularly of those directly involved with

sugarcane crop, are required to be listed in order to study the growthin productivity of sugarcane crop. Further, the globalisation of theIndian economy started in early nineties is bound to direct the trade


6/200

v

of agricultural commodities in the years to come. Keeping theseaspects in view, the present study was undertaken in the threeselected states viz., Karnataka, Uttar Pradesh and Haryana with theoverall objective of studying production, marketing and other relatedaspects of sugarcane, sugar, jaggery and khandsari, including their

price behaviour.

Even though the yield per hectare of sugarcane in India increasedsubstantially from 30.9 tonnes in 1930-31 to 66.8 tonnes in 2008-09, the productivity of sugarcane in India is still lower when comparedwith that in several other countries. There is a need on the part ofextension agencies to educate the farmers to follow the recommendedcultivation practices to reap higher productivity gains in sugarcane.

While the countries like Brazil, Australia, U.S.A., etc., haverecorded sugar recovery percentage of around 14, the sugar recovery

in India has remained stagnant at around 10 per cent for the lastfew years. Although climatic suitability determines the sugar recoveryto a great extent, there is a need on the part of sugarcane breedinginstitutes to take steps towards evolving improved varieties forimproving sugar recovery. The use of state of art machinery in sugarproduction, Tissue culture techology as also timely, crushing ofsugarcane should improve sugar recovery.

There is a need on the part of agricultural / sugar researchinstitutes to take steps towards (i) evolving high-sucrose sugarcanevarieties, (ii) evolving short-duration sugarcane varieties, (iii) evolving

drought - resistant sugarcane varieties, (iv) exploring the possibilityof staggering of planting period to ensure continuous and regularsupply of sugarcane, (v) evolving suitable machinery to facilitateharvesting of sugarcane, (vi) evolving improved technology forincreasing the productivity of sugarcane and (vii) identifying measuresto overcome the problem of high cost of conversion of sugarcane intosugar, particularly in co-operative and public sector sugar factories.

There is a need on the part of sugar factories to (a) ensure timelypayment towards supply of sugarcane, (b) arrange suitable harvestingand transportation gangs for securing maximum sugar recovery, (c)

encourage adoption of a tie-up arrangement among the sugarcanegrower, the sugar factory and the bank for ensuring better loanrecovery, (d) encourage promotion of contract farming in sugarcanewhich is working well, (e) recruit required number of qualified persons


7/200

including agricultural graduates and train them for adoption of soundtechnology in sugar production, (f) explore the possibility of theirupgrading in order to match their product with the world market, sincemany sugar factories in India are not equipped to manufacture refinedsugar, (g) go for co-generation and ethanol production along with sugar

production in order to increase their returns and viability and (h) makeefforts towards increasing the plant size and increasing the volumeof sugarcane crushed for securing higher net income from sugarproduction.

There is a need on the part of the government to (a) to explorethe possibility of adoption of SSI technology not only for ensuring lowerconsumption of water but also for increasing the profitability ofsugarcane cultivation, (b) take suitable steps towards provision ofappropriate price to sugarcane growers, sugar producers, jaggeryproducers and consumers, (c) introduce open market system for

ensuring sale of sugar within a reasonable period of 12 months afterits production and dispense with the release mechanism for sale offree sugar, (d) undertake market reform measures towards reducingthe price spread, particularly in the case of jaggery, (e) take suitablesteps towards encouraging export of sugar and jaggery, after meetingthe domestic requirement, (f) take suitable steps towards developmentof adequate infrastructure like roads, so as to facilitate smoothtransportation of sugarcane to sugar factories, (g) encourage promotionof blending petrol with ethanol, (h) explore the possibility of waivingof sugarcane purchase tax in Karnataka as in the case of Maharashtrato enable sugar factories to give a better price for sugarcane, (i) allow

sugar factories to acquire sufficient agricultural land, either on leaseor purchase basis, for seed multiplication in order to supply therequired quantity of desired variety of seed to the farmers registeredwith them, (j) ensure transparency in the distribution of sugarcanecutting orders since the co-operative sugar mills in Uttar Pradesh givepreference to the large and influential farmers in issuing sugarcanecrop cutting orders, thus forcing the small farmers either to wait fora longer time to supply sugarcane to the sugar mills or sell sugarcaneto khandsari / gur units at a lower price, (k) avoid frequent shiftingof cane command area and cane collection centres by the Office of

the Cane Commissioner, since the shifting does not encourage thesugar mill to make good investment and develop the sugarcane areain the light of fear of losing the developed area, (l) rethink on the issueof linking retaining allowance of seasonal permanent labourers with

vi


8/200

the profit of the sugar mill, since this issue is more relevant in thecase of co-operative sugar mills, as most of them are not performingwell in Uttar Pradesh and (m) ensure proper weighing of sugarcaneat cane collection centres and sugar mill gates.

There is a need on the part of institutional financing agenciesto (a) take steps towards fixing the scale of finance for sugarcanerealistically, (b) avoid under-financing of sugarcane production, (c)encourage financing of hi-tech jaggery units for securing increasedproduction of better quality jaggery, (d) encourage replacement ofoutdated machinery and technology by modern machinery andtechnology in sugar factories and jaggery production units, (e) provideadequate financial support for ensuring adequate irrigation facilitythrough canals, borewells, lift irrigation systems from rivers andintensification of micro-irrigation system in terms of promotion of dripirrigation programme, particularly in tail-end region of canal irrigated

area, (f) encourage better utilisation of by-products in sugar factories,since there is immense scope for profitable production of rectifiedspirit, ethanol and electric power and (g) encourage packing and sellingof sugarcane juice as also preparation of chikki and other productssuch as jaggery syrup, which could be a substitute for jam, since therewould be value addition through such measures.

I hope the study findings will be useful to financing banks, sugarfactories and government agencies, in formulating their future strategyfor supporting development of sugar sector in the country.

(Dr. K. G. Karmakar)

Managing Director

vii


9/200

Abbreviations

AP : Andhra Pradesh

APEDA : Agricultural and Processed Food Products ExportDevelopment Authority

APMC : Agricultural Produce Market Committee

BC : Before Christ

BHC : Benzene Hexa Chloride

BL : Bulk Litre

C : Capacity / Centigrade

CACP : Commission for Agricultural Costs and Prices

CARG : Compound Annual Rate of Growth

CC : Cash Credit

CCEA : The Cabinet Committee on Economic Affairs

Cm : Centimetre/s

CMA : Credit Monitoring Arrangements

CMIE : Centre for Monitoring Indian Economy

Co. : Coimbatore

CSM : Co-operative Sugar Mill

CV : Co-efficient of Variation

DCCB : District Central Co-operative Bank

DDM : District Development Manager

DES : Directorate of Economics and Statistics

DLTC : District Level Technical Consultancy Committee

EC : Electrical Conductivity

EU : European Union

FAO : Food and Agricultural Organisation

FCI : Food Corporation of India

FSP : Free Sugar Price

FYM : Farm Yard Manure

gm : Gramme/s

GOI : Government of India

GOK : Government of Karnataka

GSD : Grassy Shoot Disease

Ha. : Hectare /s

ICRISAT : International Crops Research Institute for Semi-Arid Tropics

IIFT : Indian Institute of Foreign Trade

IIM : Indian Institute of Management

IMF : International Monetary Fund

viii


10/200

IPM : Integrated Pest Management

ISGIEIC : Indian Sugar and General Industry Export Import Corporation

ISO : International Sugar Organisation

KCC : Kisan Credit Card

Kg : Kilogramme /s

KVK : Krishi Vigyan Kendra

LDM : Lead District Manager

LSP : Levy Sugar Price

Ltd. : Limited

MCX : Multi Commodity Exchange

MHAT : Most Hot Air Treatment

ml : millilitre/s

MLA : Member of the Legislative Assembly

mm : millimetre/s

MSP : Minimum Support Price

NABARD : National Bank for Agriculture and Rural Development

NCDEX : National Commodity and Derivative Exchange Ltd.

NDR : Net Disposable Resources

NMCE : National Multi Commodity Exchange

OBC : Oriental Bank of Commerce

OGL : Open General Licence

P : Production

p.a. : Per annum

PACCB : Primary Agricultural Credit Co-operative Bank

PACS : Primary Agricultural Credit Society

PCARDB : Primary Co-operative Agriculture and Rural Development Bank

PDS : Public Distribution System

PNB : Punjab National Bank

PP : Plant Protection

PWD : Public Works Department

Qtl. : Quintal

R : Rural

RBI : Reserve Bank of India

RCAC : Registration - cum - Allocation Certificate

RCS : Registrar of Co-operative Societies

RO : Regional Office

RRB : Regional Rural Bank

Rs. : Rupees

ix

Abbreviations Contd.


11/200

RSD : Reflex Sympathetic Dystrophy

S : Saccharum

SAP : State Advised Price

SBI : State Bank of India

SBOP : State Bank of Patiala

SCO : Sugarcane Control Order

SCSL : Sri Chamundeswari Sugars Ltd

SHSSKN : Shri Hiranyakeshi Sahakari Sakkare Karkhane Niyamit

SISMA (K) : South Indian Sugar Mills Association (Karnataka)

SLTC : State Level Technical Committee

SMP : Statutory Minimum Price

SMSSKN : Shri Malaprabha Sahakari Sakkare Karkhane Niyamit

SNK : Sankeshwar

SOF : Scale of Finance

SRI : System of Rice Identification

SSA : Sustainable Sugarcane Initiative

STC : State Trading Corporation

SUBACS : Sugarcane Based Cropping System

SWA : Sugarcane Woolly Aphid

SY : Sugar Year

TCD : Tonnes of cane crushed per day

TMSCL : The Mysore Sugar Company Limited

TN : Tamil Nadu

TPSSKL : The Pandavapura Sahakari Sakkare Karkhane Limited

TUSWL : The Ugar Sugar Works Limited

U : Urban / Utilisation

UP : Uttar Pradesh

USA : United States of America

USDA : United States Department of Agriculture

UTI : Unit Trust of India

VC : Visveswaraya Canal

Vol. : Volume

WP : Wettable Powder

WTO : World Trade Organisation

WWF : World Wildlife Fund / World Wide Fund for Nature

x

Abbreviations Contd.


12/200

EXECUTIVE SUMMARY

1. The sugar industry in India plays a vital role towards socio-economic development in the rural areas by mobilising ruralresources and generating higher income and employment

opportunities. Abort 7.5 per cent of the rural population coveringabout 45 million sugarcane farmers, their dependents and a largenumber of agricultural labourers are involved in sugarcanecultivation, harvesting and ancillary activities. About half amillion skilled and semi-skilled workers, mostly from the ruralareas are also engaged in the sugar industry. In India, the sugarindustry is the second largest agro-based industry, next only totextiles and contributes about Rs.1650 crore to the centralexchequer as excise duty and taxes annually. Besides, the StateGovernments realise about Rs.600 crore annually throughpurchase taxes, cess etc. The total value of sugarcane produced

in the country is estimated at Rs.24000 crore per year. Sugarexported from India increased from 2000 tonnes [valued atRs.0.91 crore] in the financial year 1990-91 to 1004317 tonnes[valued at Rs.2119.68 crore], in the financial year 2006-07 [upto

July 2006].

2. The sugar industry in India finds itself entangled in a complexweb of problems leading to 'declining profitability to the canegrowers as well as sugar industry'. The reasons for the same areto be traced and suitably addressed to give a boost to this sectorin the country. Unlike many western or major sugarcane growing

countries, sugarcane is the only source of sugar in our countryand therefore, any mismatch between demand and supply ofsugar in the country assumes significance at the national leveland influences the economics of sugarcane cultivation to a greatextent. The initiatives by the State Governments in the form offixing a remunerative sugarcane price and pressurising sugarmills to make payment within a reasonable time encouragedfarmers to put in more area under the sugarcane crop. Thisunderlines the need to study the economics of sugarcanecultivation in order to understand the effectiveness of the pricepolicy in determining the area under sugarcane crop. Theinitiatives of research institutions, particularly of those directlyinvolved with sugarcane crop are required to be listed in orderto study the growth in productivity of sugarcane crop. Further,the globalisation of the Indian economy started in early 90s is

xi


13/200

bound to direct the trade of agricultural commodities in the yearsto come.

3. Keeping the above aspects in view, the present study wasundertaken in the three selected states viz., Karnataka, Uttar

Pradesh and Haryana, to trace the movement of sugarcane cropfrom the farm to the factory as also to the jaggery / khandsariproduction unit and of sugar and jaggery / khandsari from thesugar factory and the jaggery / khandsari production unitrespectively to the consumer, with the broad objectives ofunderstanding the nature of production conditions, highlightingdemand-supply mismatches, if any and studying financing,marketing and other related aspects of sugarcane, sugar, jaggeryand khandsari, including their price behavior. The findings ofthe study are based on a sample of 233 units comprising 190sugarcane growers, 14 sugar factories / mills, 12 jaggery [gur]

producers, one khandsari producer, three sugarcane societies,four commission agents, four wholesalers and five retailers, spreadover seven districts in these three states. The reference year ofthe study was 2005-06. Since the findings are based on arelatively small sample, generalisation of the findings at macrolevel must be done carefully. The sample sugarcane growers inUttar Pradesh and Haryana were categorised into small and largefarmers [possessing holdings of less than or equal to and morethan five acres] respectively and costs and returns from sugarcaneproduction were worked out for each category.

4. In Karnataka, the cost per acre of production of planted sugarcanevaried from Rs.31691 [Belgaum district] to Rs.36720 [Mandyadistrict], the average being Rs.33882 and that of ratoon sugarcanevaried from Rs.20315 [Belgaum district] to Rs.33426 [Mandyadistrict], the average being Rs.27623. Lower expenditure inraising ratoon sugarcane could be attributed mainly to non-incurring of expenditure towards tractor hire [which wasnecessary for field preparation before planting in the case ofplanted sugarcane] and planting and incurring of lowerexpenditure towards seed material [used for gap filling] and farm

yard manure. The cost of production of sugarcane per acre variedfrom Rs.29475 in Belgaum district to Rs.35790 in Mandya district,the average being Rs.32409. Higher cost of production ofsugarcane per acre observed in Mandya district, could be

xii


14/200

attributed to the fact that harvesting and transportation chargesof sugarcane were met by the sugarcane growers. However, inthe case of Belgaum district, these charges were met by the sugarfactories.

5. In Uttar Pradesh, the cost per acre of production of plantedsugarcane varied from Rs.15252 [Azamgarh district] to Rs.17710[Sitapur district] and Rs.18792 [Muzaffarnagar district], theaverage being Rs.17606 and that of ratoon sugarcane varied fromRs.10902 [Azamgarh district] to Rs.12558 [Sitapur district] andRs.15032 [Muzaffarnagar district], the average being Rs.13317.Lower expenditure in raising ratoon sugarcane could be attributedto non-incurring of expenditure towards seed, FYM, FYMapplication, field preparation and planting. The cost of productionof sugarcane per acre varied from Rs.13211 [Azamgarh district]to Rs.15400 [Sitapur district ] and Rs.16849 [Muzaffarnagar

district], the average being Rs.15548. Highest cost of productionof sugarcane per acre observed in Muzaffarnagar district couldbe attributed to intensive cultivation characterised by higherexpenditure incurred towards field preparation, planting,interculture operation, irrigation, harvesting and transportationof sugarcane from the farm to the place of sale. In all the selecteddistricts, the cost of production per acre of planted sugarcane washigher in the case of small farmers, when compared with that oflarge farmers and was attributed mainly to higher imputed valueof family labour, higher depreciation and higher interest on fixedcapital. However, higher cost of production of ratoon sugarcane

per acre was observed in the case of large farmers and wasattributed mainly to higher expenditure incurred towardsfertilisers, interculture operation, irrigation, earthing up andtransportation of sugarcane after its harvest from the farm to theplace of sale.

6. In Haryana also the cost of production per acre was higher in thecase of planted sugarcane [Rs.27831], when compared with thatof ratoon sugarcane [Rs.24213]. Lower cost of production per acreof ratoon sugarcane could be attributed to non-incurring ofexpenditure towards seed and incurring of lower expendituretowards fertilisers and manure. Much difference was not observedin the cost of production per acre of planted sugarcane of smallfarmers [Rs.27849] vis-a-vis large farmers [Rs.27821]. However,the cost of production of ratoon sugarcane per acre was higher

xiii


15/200

in the case of small farmers [Rs.25830] vis-a-vis large farmers[Rs.23567]. This was mainly due to higher expenditure incurredtowards labour. The cost of production of sugarcane per acreworked out to Rs.25909.

7. In Karnataka, the yield per acre of sugarcane varied from 404.2quintals in Mandya district to 408.3 quintals in Belgaum district,the average being 406.4 quintals. Thus, much difference was notobserved in the yield per acre of sugarcane between the twoselected districts. In Belgaum district, the yield per acre wasslightly higher in the case of ratoon sugarcane [416.9 quintals]vis-a-vis planted sugarcane [406.2 quintals] and in Mandyadistrict, the corresponding yield figures were 418.0 quintals and398.8 quintals. Thus, the study revealed the possibility ofsecuring even slightly higher level of yield from ratoon sugarcane,when compared with that of planted sugarcane.

8. In Uttar Pradesh, the yield per acre of sugarcane varied from190.78 quintals [Azamgarh district] to 228.45 quintals [Sitapurdistrict] and 265.38 quintals [Muzaffarnagar district], the averagebeing 235.84 quintals. Lowest yield per acre of sugarcaneobtained in Azamgarh district was due to poor level of input use.Higher yield per acre of sugarcane obtained in Muzaffarnagardistrict was associated with the highest cost of production ofsugarcane per acre. As in the case of Karnataka the yield peracre was higher in the case of ratoon sugarcane [246.96 quintals]when compared with that of planted sugarcane [228.10 quintals].

In all the selected districts also, the yield per acre was higher inthe case of ratoon sugarcane, when compared with that of plantedsugarcane. Much difference was not observed in the yield per acreof planted sugarcane of small farmers [227.58 quintals] vis-a-vislarge farmers [228.37 quintals] in Uttar Pradesh. However, in thecase of ratoon sugarcane, the yield per acre was higher in thecase of large farmers [246.96 quintals] vis-a-vis small farmers[239.04 quintals].

9. Unlike Karnataka and Uttar Pradesh, the yield per acre of plantedsugarcane [241.47 quintals] was higher than that of ratoon

sugarcane [208.42 quintals], in Haryana. In Haryana, smallfarmers secured higher yield per acre of planted and ratoonsugarcane being 246 quintals and 211 quintals respectively whencompared with large farmers whose corresponding yield figures

xiv


16/200

were 239 quintals and 207 quintals. On an average, the yieldper acre of sugarcane in Haryana worked out to 223.90 quintals.

10. In Karnataka, the gross income per acre of sugarcane varied fromRs.40420 in Mandya district to Rs.51040 in Belgaum district, the

average being Rs.46109. While in Belgaum district, the grossincome per acre amounted to Rs.50782 in the case of plantedsugarcane as against Rs.52110 in the case of ratoon sugarcane,in Mandya district, the gross income per acre amounted toRs.39880 in the case of planted sugarcane as against Rs.41800in the case of ratoon sugarcane. Higher gross income generationfrom sugarcane per acre in Belgaum district could be attributedto higher price per tonne secured being Rs.1250 as againstRs.1000 in Mandya district and higher price realisation per tonneof sugarcane observed in the case of Belgaum district could beattributed to higher sugar recovery due to better soil condition,

being 11.54 per cent as against only 9.10 per cent in Mandyadistrict for the sugar year 2005-06.

11. In Uttar Pradesh, the gross income per acre of sugarcane variedfrom Rs.18527 in Azamgarh district to Rs.23663 in Sitapur districtand Rs.27989 in Muzaffarnagar district, the average beingRs.24381. While in Azamgarh district, the gross income per acreamounted to Rs.17867 in the case of planted sugarcane as againstRs.19275 in the case of ratoon sugarcane, in Sitapur district, thegross income per acre amounted to Rs.23380 in the case ofplanted sugarcane as against Rs.24011 in the case of ratoon

sugarcane and in Muzaffarnagar district, the gross income peracre amounted to Rs.26928 in the case of planted sugarcane asagainst Rs.28983 in the case of ratoon sugarcane. Highest grossincome generation from sugarcane per acre in Muzaffarnagardistrict could be attributed to the highest yield per acre secured,as mentioned elsewhere and the highest price realisation perquintal of sugarcane [Rs.105.47] as against Rs.103.58 in Sitapurdistrict and Rs.97.11 in Azamgarh district. The lowest pricerealisation per quintal of sugarcane in Azamgarh district couldbe attributed to the existence of only one sugar mill [Co-operativeSugar Mill in Sathion] which required complete modernisation;the middlemen took away a portion of the total cane bill of thefarmers by one way or the other and their influence in the supplyof cane was quite high and there was comparatively higher

xv


17/200

proportion of cane diversion to gur and khandsari making unitswho offered less price particularly to small farmers, due to theirpoor bargaining power. Gross income generation per acre fromplanted and ratoon sugarcane was higher in the case of largefarmers vis-a-vis small farmers in UP due to higher yield per acre

and higher price realisation.

12. Unlike Karnataka and Uttar Pradesh, the gross income per acreof planted sugarcane [Rs.26803] was higher than that of ratoonsugarcane [Rs.23135] in Haryana. In Haryana, small farmerssecured higher gross income per acre of planted and ratoonsugarcane being Rs.27306 and Rs.23421 respectively vis-a-vislarge farmers whose corresponding gross income figures wereRs.26529 and Rs.22977, due to higher yield secured. On anaverage, the gross income per acre of sugarcane in Haryanaamounted to Rs.24853.

13. In Belgaum district, the net income per acre after accounting forthe imputed value of family labour varied from Rs.19091 in thecase of planted sugarcane to Rs.31795 in the case of ratoonsugarcane, the average being Rs.21565. The corresponding netincome figures for Mandya district were substantially lower beingRs.3160, Rs.8374 and Rs.4630. This reveals the possibility ofsecuring substantially higher net income even from ratoonsugarcane production. Higher net income generation per acrefrom ratoon sugarcane in the selected districts could be attributedto higher yield and lower cost of production. This points out to

the need for encouraging promotion of ratoon sugarcanecultivation also. Further, higher net income generation fromsugarcane production per acre in Belgaum district [Rs.21565] vis--vis Mandya district [Rs.4630] could be attributed mainly tohigher price realisation and lower cost of production. InKarnataka, the net income per acre without the imputed value offamily labour was higher in the case of ratoon sugarcane[Rs.21270] vis-a-vis planted sugarcane [Rs.13230] and the netincome per acre with the imputed value of family labour was alsohigher in the case of ratoon sugarcane [Rs.18740] vis-a-vis plantedsugarcane [Rs.12149]. On an average, the net income fromsugarcane production per acre without and with the imputedvalue of family labour amounted to Rs.15122 and Rs.13700respectively.

xvi


18/200

14. In Muzaffarnagar district, the net income per acre after accountingfor the imputed value of family labour varied from Rs.8136 in thecase of planted sugarcane to Rs.13951 in the case of ratoonsugarcane, the average being Rs.11140. The corresponding netincome figures were lower, being Rs.2615, Rs.8373 and Rs.5316

for Azamgarh district and Rs.5670, Rs.11453 and Rs.8263 forSitapur district. This reveals the possibility of securingsubstantially higher net income even from ratoon sugarcaneproduction, as in the case of Karnataka. Higher net incomegeneration per acre from ratoon sugarcane in the selected districtscould be attributed to higher yield and lower cost of productionas in the case of Karnataka. This points out to the need forencouraging ratoon sugarcane cultivation also. Further, highestnet income generation from sugarcane production per acre inMuzaffarnagar district [Rs.11140] vis-a-vis Azamgarh district[Rs.5316] and Sitapur district [Rs.8263] could be attributed to the

highest yield per acre [265.38 quintals] as against 190.78 quintalsin Azamgarh district and 228.45 quintals in Sitapur district,highest realisation of price per quintal of sugarcane [Rs.105.47]as against Rs.97.11 in Azamgarh district and Rs.103.58 in Sitapurdistrict and highest gross income generation per acre of sugarcanein Muzaffarnagar district [Rs.27989] as against Rs.18527 inAzamgarh district and Rs.23663 in Sitapur district. In UttarPradesh, the net income per acre without the imputed value offamily labour was higher in the case of ratoon sugarcane[Rs.13923] vis-a-vis planted sugarcane [Rs.8028] and the net

income per acre with the imputed value of family labour was alsohigher in the case of ratoon sugarcane [Rs.11934] vis-a-vis plantedsugarcane [Rs.5970]. On an average in Uttar Pradesh the netincome from sugarcane production per acre without and with theimputed value of family labour amounted to Rs.10858 andRs.8833 respectively.

15. Though the cost of production of sugarcane in Muzaffarnagardistrict [Rs.16849] was higher by Rs.3638 and Rs.1449 whencompared with that of Azamgarh and Sitapur districts respectively,additional gross income generation over that of Azamgarh and

Sitapur districts was Rs.9462 and Rs.4326 respectively. Thesefigures amply demonstrate the high responsiveness of sugarcaneto investment.

xvii


19/200

16. In Uttar Pradesh, the net income per acre of planted sugarcanewith the imputed value of family labour was higher in the case oflarge farmers [Rs.6659] vis-a-vis small farmers [Rs.4680] andcould be attributed mainly to higher gross income generation,being Rs.24135 as against Rs.22530 secured by small farmers and

lower cost of production, being Rs.17476 as against Rs.17850incurred by small farmers. The net income per acre of ratoonsugarcane with the imputed value of family labour was also higherin the case of large farmers [Rs.12747] vis-a-vis small farmers[Rs.10403] and could be attributed mainly to higher yield, being246.96 quintals as against 239.04 quintals obtained by smallfarmers and higher gross income generation being Rs.26191 asagainst Rs.23474 secured by small farmers.

17. In all the selected districts of Uttar Pradesh, the price realisationper quintal of sugarcane was higher in the case of large farmers

than in the case of small farmers. In Muzaffarnagar district, theprice realisation per quintal of sugarcane worked out to Rs.107.1and Rs.100.8 in respect of large and small farmers respectively.

The corresponding figures were Rs.105.8 and Rs.100.3 for Sitapurdistrict and Rs.101.5 and Rs.91.6 for Azamgarh district. Thehighest price realisation by farmers in Muzaffarnagar district couldbe attributed to the existence of comparatively more number ofsugar mills, particularly in the private sector, with higher crushingcapacities.

18. In Haryana, with and without the imputed value of family labour,

the net income per acre of sugarcane amounted to (-) Rs.1056and Rs.1043 respectively. The corresponding net income figureswere (-) Rs.1028 and Rs.889 for planted sugarcane and Rs.(-) 1078and Rs.1181 for ratoon sugarcane, Thus, the family labour costcould not be met fully out of the income generated from sugarcaneproduction.

19. The net income per acre of planted sugarcane [without theimputed value of family labour] in Haryana was higher in the caseof small farmers [Rs.1442] as compared to large farmers [Rs.588].However, with the imputed value of family labour, the net loss

per acre was higher in the case of large farmers [Rs.1292] ascompared to small farmers [Rs.543]. Higher loss observed in thecase of large farmers could be attributed to lower yield. The netincome per acre of ratoon sugarcane without the imputed value

xviii


20/200

of family labour in Haryana was higher in the case of large farmers[Rs.1450] vis-a-vis small farmers [Rs.696]. With the imputed valueof family labour, the net loss per acre was less in the case of largefarmers [Rs.590] vis-a-vis small farmers [Rs.1959]. Higher netincome realisation without considering the imputed value of family

labour in the case of large farmers could be attributed to lowercost of production. Thus, in the case of large farmers, lower costincurred [without and with the imputed value of family labour]led to higher profitability and lower loss respectively. Similarly,in the case of small farmers, higher cost incurred without andwith the imputed value of family labour led to lower profitabilityand higher loss respectively.

20. The yield of sugarcane per acre was the maximum in Karnataka[406.40 quintals], followed by Uttar Pradesh [237.16 quintals] andHaryana [223.90 quintals]. The price realisation per quintal of

sugarcane was the maximum in Karnataka [Rs.113.46], followedby Haryana [Rs.111.00] and Uttar Pradesh [Rs.102.80]. The costof production of sugarcane per acre was the maximum inKarnataka [Rs.32409] followed by Haryana [Rs.25909] and UttarPradesh [Rs.15548]. The net income generated from an acre ofsugarcane amounted to Rs.13700 and Rs.8832 in Karnataka andUttar Pradesh respectively. However, in Haryana, the net lossper acre after accounting for the imputed value of family labourwas Rs.1056 and the net income per acre without accounting forthe imputed value of family labour was Rs.1043. Lowestprofitability of sugarcane in Haryana was mainly due to the lowest

yield per acre. There is, therefore, a need on the part of sugarcaneresearch institutions and extension agencies to take effective stepstowards improving the productivity of sugarcane.

21. For the nine-year period ended 2008-09, the compound annualrate of growth [CARG] in respect of the area under sugarcane inIndia was positive, being 1.34 per cent, indicating that the areaunder sugarcane cultivation in India grew at a rate of 1.34 percent per annum. The CARG in respect of the area undersugarcane in India was positive in the case of Andhra Pradesh,Bihar, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.However, this was negative in the case of Haryana, Karnataka,Punjab and Uttaranchal, thus pointing out to the need for bringingabout stability. Wide fluctuation in the area under sugarcane

xix


21/200

cultivation in India was noticed, the co-eficient of variation [CV]being 10.69 per cent. The CV was the maximum in Maharashtra[39.87 per cent], followed by Karnataka [30.39 per cent], Punjab[20.85 per cent], Tamil Nadu [20.65 per cent] and Haryana [15.27per cent].

22. For the nine-year period ended 2008-09, the CARG in respect ofsugarcane production in India was positive being 1.67 per cent.

The CARG in respect of sugarcane production was positive inAndhra Pradesh, Bihar, Gujarat, Maharashtra, Tamil Nadu andUttar Pradesh. However, this was negative in the case of Haryana,Karnataka, Punjab and Uttaranchal, thus pointing out to the needfor bringing about stability. Wide variation in the production ofsugarcane in India was noticed, the CV being 13.81 per cent. TheCV was the maximum in Maharashtra [42.72 per cent], followedby Karnataka [38.41 per cent], Tamil Nadu [24.84 per cent],

Punjab [23.19 per cent], Bihar [14.14 per cent], Andhra Pradesh[13.26 per cent], Gujarat [10.26 per cent] and Haryana [9.96 percent].

23. For the nine-year period ended 2008-09, the CARG in respect ofproductivity of sugarcane in India was positive being 0.33 percent, indicating that the productivity of sugarcane had almostremained stagnant. The CARG in respect of productivity ofsugarcane was positive in the case of Andhra Pradesh, Gujarat,Haryana, Tamil Nadu, Uttar Pradesh and Uttaranchal. However,this was negative in the case of Bihar, Karnataka, Maharashtra

and Punjab, thus pointing out to the need for taking effectivesteps towards improving it. For the country as a whole, the CVin productivity was not much, being 4.62 per cent. The CV wasthe maximum in Bihar [11.78 per cent], followed by Karnataka[11.41 per cent], Maharashtra [10.65 per cent] and Haryana [8.16per cent].

24. In Belgaum district, the cost of sugar production per quintal variedfrom Rs.1653 in Shri Malaprabha Sahakari Sakkare KarkhaneNiyamit [SMSSKN] to Rs.1754 in Shri Hiranyakeshi SahakariSakkare Karkhane Niyamit [SHSSKN], the average being Rs.1725.

The gross income from production of sugar and its by-productsamounted to Rs.1766 and Rs.1672 in SMSSKN and SHSSKNrespectively, the average being Rs.1699 per quintal. The netincome from sugar production per quintal amounted to Rs.113

xx


22/200

and (-) Rs.82 in SMSSKN and SHSSKN respectively, the averagebeing (-) Rs.26.

25. Even though SHSSKN had, during the financial year 2005-06,incurred loss from sugar production, its distillery unit worked for

132 days and produced 78,49,194.2 litres of spirit from 28463.9tonnes of molasses. Further, the arrack unit of the factorymarketed 73,32,400 litres of arrack and was involved in profitableproduction of arrack. The distillery unit of SMSSKN had alsoproduced 18,11,026 litres of spirit. Thus, there exists thepossibility on the part of sugar factories to overcome the problemof loss from sugar production through profitable utilisation of by-products from sugar production.

26. Jaggery production per unit during the reference year varied from846 quintals in Belgaum district to 3041.98 quintals in Mandya

district. Annual gross income realised per unit varied fromRs.9.68 lakh in Belgaum district to Rs.32.77 lakh in Mandyadistrict, whereas annual net income per unit varied from Rs.0.84lakh in Belgaum district to Rs.4.99 lakh in Mandya district.

27. The study revealed the possibility of securing higher net incomefrom jaggery production per quintal from using own sugarcane[Rs.557] as against Rs.126 in the case of jaggery production usingbought sugarcane in Mandya district.

28. A falling trend in free sugar prices was observed in all the selectedsugar factories.

29. The sugar sold as a proportion of sugar produced varied from 31per cent in the case of SMSSKN to 72 per cent in the case ofSHSSKN. Thus, a fairly high proportion of sugar produced wasnot sold particularly by SMSSKN during the financial year 2005-06. Since both free sugar and levy sugar were subject to monthlyquotas decided by the Central Government, there was largeaccumulation of sugar stock at the factory level, thus adverselyaffecting the quality of sugar.

30. Decrease in the market arrival of jaggery over the period from

2001-02 to 2005-06 led to an increase in its price per quintal inthe selected districts as also Karnataka State.

xxi


23/200

31. The price spread i.e., the difference between the price paid by theconsumer and the price received by the producer worked out toRs.347 per quintal and Rs.697 per quintal in Karnataka in thecase of sugar and jaggery respectively. Higher price spreadobserved in the case of jaggery, when compared with that of sugar

was due to higher margins retained by the wholesaler, the retailerand the commission agent.

32. The study of sugar mills in UP reveals that the small size plantsand their poor efficiency levels had led to an increase in the costof production of sugar in the case of co-operative mills. Theaverage cost of production of sugar per quintal by co-operativemills at Morna in Muzaffarnagar district and Mahmudabad inSitapur district was higher at Rs.1834 and Rs.1929 respectivelyas compared to that of a private mill at Morna [Rs.1624]. TheKisan Sahkari Mill at Sathion in Azamgarh district had produced

sugar at a higher cost of Rs.5326 per quintal, since the mill hadreached the junk level.

33. The gur making units [kolhus] in UP purchased sugarcaneprimarily from small farmers [who could not supply sugarcaneto the sugar mills] at a price which was lower by Rs.15 to Rs.30per quintal than that offered by the sugar mills. However, duringthe period of shortage, they bought sugarcane at prices whichwere higher than those offered by the sugar mills. The study offour gur making units in Muzaffarnagar and Sitapur districtsrevealed that the cost per quintal of gur production worked out

to Rs.1377 including Rs.1175 towards sugarcane, Rs.124 towardslabour, ingredients etc., and Rs.78 towards other charges. Theprice received per quintal of gur being Rs.1610, the net gain perquintal of gur production amounted to Rs.233.

34. The factors adversely affecting the performance of sugar millsinclude (i) farmers not following recommended mix of early,medium and late varieties of sugarcane in order to maintain acontinuous supply of cane to mills, (ii) farmers growing varietiesnot recognised by the mills, (iii) middlemen influencing the canesupply to the mills, (iv) farmers irrigating their fields just before

harvesting of the crop for increasing the weight of the cane and(v) farmers diverting a portion of the cane produced, during theperiod of shortage of sugarcane to khandsari and gur makingunits which offer higher prices than those offered by sugar mills.

xxii


24/200

35. A cane crusher located at Chhapar in Muzaffarnagar district hadcrushed 2.65 lakh quintals of sugarcane during 2005-06 seasonand produced 11025 quintals of khandsari, 17614 quintals of gur,and 460 quintals of rab tin. The net profit after all taxes fromthis unit was Rs.4.15 lakh.

36. The study in Uttar Pradesh brought out the need for closing ofthe Kisan Chini Mill at Sathion in Azamgarh district, since thisunit had reached the junk level and produced sugar at a very highcost of Rs.5326 per quintal and recommended for setting up of anew mill in the area.

37. The study of sugar mills in Haryana established a directrelationship between the volume of sugarcane crushed andprofitability of sugar production. The Yamunanagar Sugar Millwith the highest quantity of sugarcane crushed produced sugar

at the lowest cost of production per quintal [Rs.1527], comparedto Shahabad Sugar Mill [Rs.1744] and Kaithal Sugar Mill[Rs.3903]. The abnormally high cost of production in the case ofKaithal Sugar Mill was on account of low volume of sugarcanecrushed. While the Shahabad and Yamunanagar Sugar Millsearned a net profit of Rs.77 and Rs.339 per quintal of sugarproduction, the Kaithal Sugar Mill incurred a loss of Rs.205 perquintal, due to high cost of production and low volume ofsugarcane crushed. There is, therefore, a need for expansion ofthe capacity of the mills in sugarcane surplus areas.

38. In Haryana, sugarcane was marketed through three channels, viz.,Sugarcane Grower - Sugar Mill [Channel I], Sugarcane Grower -Sugarcane Growers' Society - Sugar Mill [Channel II] andSugarcane Grower - Gur Crusher [Channel III]. Major quantumof produce was marketed through Channel I, as it was the mostefficient marketing channel.

39. Prof Samir K Datta, IIM, Ahmedabad and Prof. Kriti BardhanGupta, IIFT, New Delhi attempted to assess the competitivenessof Indian Sugar by studying a fairly large and representativesample of 131 sugar mills in India and concluded that, in general,

the Indian Sugar Industry is not export competitive. Observingthat the price paid to the farmers for sugarcane was higher thanthe statutory minimum price [SMP], they indicated that theindustry would become very competitive, if sugarcane was paid

xxiii


25/200

as per SMP. However, considering the present state of unviabilityof sugarcane cultivation in Haryana, it is recommended that thefarmers may be continued to be paid at state advised price [SAP]and the difference between the SAP and the SMP may be borneby State and Central Governments and paid to the sugar mills.

Policy Implications / Action Points

40. Major policy implications / action points emerging from the studyare as follows :-

i. The study revealed the profitability of sugarcane productionin the selected districts of Karnataka and Uttar Pradesh andalso the possibility of securing higher net income from an acreof ratoon sugarcane, when compared with that of plantedsugarcane, particularly due to lower level of input use andlower cost of production, thus pointing out to the need for

promoting ratoon sugarcane cultivation also.

ii. There is a need on the part of institutional financing agenciesto (a) take steps towards fixing the scale of finance forsugarcane realistically, (b) avoid under-financing of sugarcaneproduction, (c) encourage financing of hi-tech jaggery unitsfor securing increased production of better quality jaggery,(d) encourage replacement of outdated machinery andtechnology by modern machinery and technology in sugarfactories and jaggery production units, (e) provide adequatefinancial support for ensuring adequate irrigation facility

through canals, borewells, lift irrigation systems from riversand intensification of micro-irrigation system in terms ofpromotion of drip irrigation programme, particularly in tailend region of canal irrigated area, (f) encourage betterutilisation of by-products in sugar factories, since there isimmense scope for profitable production of rectified spirit,ethanol and electric power and (g) encourage packing andselling of sugarcane juice as also preparation of chikki andother products such as jaggery syrup, which could be asubstitute for jam, since there would be value addition

through such measures.

iii. While the countries like Brazil, Australia, U.S.A., etc., haverecorded sugar recovery percentage of around 14, the sugarrecovery in India has remained stagnant at around 10 per

xxiv


26/200

cent for the last few years. Although climatic suitabilitydetermines the sugar recovery to a great extent, there is aneed on the part of sugarcane breeding institutes to takesteps towards evolving improved technology for improvingsugar recovery.

iv. There is a need on the part of sugar factories to (a) ensuretimely payment towards supply of sugarcane, (b) arrangesuitable harvesting and transportation gangs for securingmaximum sugar recovery, (c) encourage adoption of a tie-uparrangement among the sugarcane grower, the sugar factoryand the bank for ensuring better loan recovery, (d) encouragepromotion of contract farming in sugarcane which is workingwell, (e) recruit required number of qualified personsincluding agricultural graduates and train them for adoptionof sound technology in sugar production, (f) explore the

possibility of their upgrading in order to match their productwith the world market, since many sugar factories in Indiaare not equipped to manufacture refined sugar, (g) go forcogeneration and ethanol production along with sugarproduction in order to increase their returns and viability and(h) make efforts towards increasing the plant size andincreasing the volume of sugarcane crushed for securinghigher net income from sugar production.

v. There is a need on the part of the government to (a) explorethe possibility of adoption of SSI technology not only for

ensuring lower consumption of water but also for increasingthe profitability of sugarcane cultivation, (b) take suitablesteps towards provision of appropriate price to sugarcanegrowers, sugar producers, jaggery producers and consumers,(c) introduce open market system for ensuring sale of sugarwithin a reasonable period of 12 months after its productionand dispense with the release mechanism for sale of freesugar, (d) undertake market reform measures towardsreducing the price spread, particularly in the case of jaggery,(e) take suitable steps towards encouraging export of sugarand jaggery, after meeting the domestic requirement, (f) takesuitable steps towards development of adequate infrastructurelike roads, so as to facilitate smooth transportation ofsugarcane to sugar factories, (g) encourage promotion ofblending petrol with ethanol, (h) explore the possibility of

xxv


27/200

waiving of sugarcane purchase tax in Karnataka as in the caseof Maharashtra to enable sugar factories to give a better pricefor sugarcane, (i) allow sugar factories to acquire sufficientagricultural land, either on lease or purchase basis, for seedmultiplication in order to supply the required quantity of

desired variety of seed to the farmers registered with them,(j) ensure transparency in the distribution of sugarcanecutting orders since the co-operative sugar mills in UttarPradesh give preference to the large and influential farmersin issuing sugarcane crop cutting orders, thus forcing thesmall farmers either to wait for a longer time to supplysugarcane to the sugar mills or sell sugarcane to khandsari/ gur units at a lower price, (k) avoid frequent shifting ofcane command area and cane collection centres by the Officeof the Cane Commissioner, since the shifting does notencourage the sugar mill to make good investment anddevelop the sugarcane area in the light of fear of losing thedeveloped area, (l) rethink on the issue of linking retainingallowance of seasonal permanent labourers with the profit ofthe sugar mill, since this issue is more relevant in the caseof co-operative sugar mills, as most of them are notperforming well in Uttar Pradesh and (m) ensure properweighing of sugarcane at cane collection centres and sugarmill gates.

41. There is a need on the part of agricultural / sugar researchinstitutes to take steps towards (i) evolving high-sucrosesugarcane varieites, (ii) evolving short-duration sugarcane varieies,

(iii) evolving drought - resistant sugarcane varieties, (iv) exploringthe possibility of staggering of planting period to ensurecontinuous and regular supply of sugarcane, (v) evolving suitablemachinery to facilitate harvesting of sugarcane, (vi) evolvingimproved technology for increasing the productivity of sugarcaneand (vii) identifying measures to overcome the problem of highcost of conversion of sugarcane into sugar, particularly in co-operative and public sector sugar factories.

42. Even though the yield per hectare of sugarcane in India increasedsubstantially from 30.9 tonnes in 1930-31 to 66.8 tonnes in 2008-09, the productivity of sugarcane in India is still lower when

compared with that in several other countries. There is a needon the part of extension agencies to educate the farmers to followthe recommended cultivation practices to reap higher productivitygains in sugarcane.

xxvi


28/200

CHAPTER I

Introduction

Sugarcane and sugar beet are the main sources of sugar in Asia andEurope respectively. While sugarcane is grown primarily in the

tropical and sub-tropical zones of the southern hemisphere, sugar beetis grown in the temperate zones of the northern hemisphere. During1970s, sugarcane and sugar beet accounted for 60 per cent and 40per cent respectively of the total sugar production in the world.However, during 1990s, the corresponding figures were 68 per centand 32 per cent. During 2005-06, sugarcane accounted for 75 percent of the total sugar production in the world and sugar beetaccounted for the rest. These figures amply demonstrate the growingimportance of sugarcane in sugar production. Sugarcane providesthe raw material mainly for the production of white sugar, jaggery [gur]

and khandsari. It is also used for chewing and extraction of juice forbeverage purpose.

1.02 Sugarcane originated in New Guinea where it has been knownsince about 6000 BC. From about 1000 BC its cultivation graduallyspread along human migration routes to Southern Asia and India. Itis thought to have hybridised with wild sugarcanes of India and China,to produce the 'thin' canes. Sugarcane has a very long history ofcultivation in the Indian sub-continent. The earliest reference to itis in the Atharva Veda [1500-800 BC] where it is called ikshu andmentioned as an offering in sacrificial rites. The Atharva Veda uses

it as a symbol of sweet attractiveness. The word 'sugar' is derivedfrom the ancient Sanskrit word sharkara. By the 6th century BCsharkara was frequently referred in Sanskrit texts which evendistinguished superior and inferior varieties of sugarcane. A Persianaccount from the 6th century BC gives the first account of solid sugarand describes it as coming from the Indus Valley. This early sugarwould have resembled what is known as 'raw' sugar: Indian darkbrown sugar or gur.

1.03 Sugarcane Breeding Institute, Coimbatore, internationallyrecognised as the world leader in sugarcane breeding, has the credit

of being the first institute in the world to initiate inter-specifichybridization between Saccharum officinarum and Saccharumspontaneum species in the beginning of the 20th century resultingin the development of Co 205-an epoch making hybrid distinctly

1


29/200

superior in yield and sucrose content to the indigenous low yieldingthen canes belonging to S. sinense and S. barberi species thencultivated in North India. This was the beginning of a sweet revolutionin the world. The most outstanding research finding of the IndianInstitute of Sugarcane Research, Lucknow in seventies was the

development of MHAT of seed cane which effectively controls RSD andGSD diseases, responsible for gradual decline of productivity ofsugarcane particularly the ratoon crop. Based on this technology, athree-tier seed programme was developed which helped in producingdisease free seed and prolonging the life span of important varietiesunder cultivation. This technology has proved effective in maintainingand improving the sugarcane yield as well as sugar recovery in thecountry. Micro-propogation of seed cane through Tissue Culture usingapical meristem tissue has been developed recently which may replacethe traditional system of seed multiplication in future.

1.04 During 2005, in terms of area under sugarcane, India (3.75million ha.) stood next to Brazil (5.77 million ha) and in terms ofproduction of sugarcane also, India (232.32 million tonnes) stood nextto Brazil (420.12 million tonnes)1. However, in terms of productivityper hectare of sugarcane, India (61.95 tonnes) stood tenth, the firstnine countries being Colombia (92.29 tonnes), Australia (91.06tonnes), Philippines (81.58 tonnes), Indonesia (72.86 tonnes), Brazil(72.85 tonnes), Mexico (70.61 tonnes), South Africa (69.63 tonnes),United States of America (66.63 tonnes) and China (65.16 tonnes).Lower productivity of sugarcane in India could be attributed to raisingof sugarcane under diverse growing conditions by millions of farmers.

This points out to the need for taking suitable steps towards increasingthe productivity of sugarcane in India.

1.05 In India, during 2008-09, the gross area under rice was themaximum (45.6 million ha.), followed by wheat (27.7 million ha), cotton(9.5 million ha.), bajra (8.7 million ha.), gram (8.2 million ha.), maize(8.0 million ha.), jowar (7.7 million ha.), groundnut (6.2 million ha.),and sugarcane (4.4 million ha.)2. Thus, in terms of cropped area,sugarcane stands ninth in the country.

1. Source : Faostat citation 2005

2. Government of India (2009), "Economic Survey 2008-09," Ministry of Finance,Economic Division, New Delhi.

2


30/200

Sugar Industry in India

1.06 The sugar industry in India plays a vital role towards socio-economic development in the rural areas by mobilising rural resourcesand generating higher income and employment opportunities. About7.5 per cent of the rural population, covering about 45 millionsugarcane farmers, their dependents and a large number ofagricultural labourers are involved in sugarcane cultivation, harvestingand ancillary activities. About half a million skilled and semi-skilledworkers, mostly from the rural areas are also engaged in the sugarindustry3.

3. Directorate of Sugar, Revitalisation of Sugar Industry, Department of Food andPublic Distribution, Ministry of Food, Consumer Affairs and Public Distribution,

GOI, Krishi Bhavan, New Delhi, 14 July 2006

4. National Federation of Co-operative Sugar Factories Ltd., New Delhi, Co-operativeSugar, Vol.40, No. 10, June 2009.

5. Sugar-year refers to the period from 01 October to 30 September.

1.07 In India, the sugar industry is the second largest agro-basedindustry, next only to textiles and contributes about Rs.1650 croreto the central exchequer as excise duty and taxes annually. Besides,the state governments realise about Rs.600 crore annually throughpurchase taxes, cess, etc. The total value of sugarcane produced in

the country is estimated at Rs.24000 crore per year.

1.08 In 1980-81, utilisation of sugarcane output was maximum forthe production of gur and khandsari (55 per cent), followed by whitesugar (33 per cent) and seed, feed and chewing (12 per cent). However,utilisation of sugarcane for white sugar production increased from 61per cent in 2001-02 to 73 per cent in 2007-08, and that for gur andkhandsari decreased from 28 per cent to 15 per cent during the sameperiod. Thus, utilisation of sugarcane for white sugar production hasbeen rising and that for gur and khandsari production, falling. Forseed, feed and chewing, utilisation of sugarcane has been stable atabout 12 per cent4 .

1.09 The production of sugar in India increased substantially from164.53 lakh tonnes in sugar year (SY)5 1995-96 to 201.45 lakh tonnesin SY 2002-03 and decreased to 135.46 lakh tonnes in SY 2003-04and to 126.91 lakh tonnes in SY 2004-054 particularly due to theonslaught of drought and white woolly aphid in major sugar producingstates like Maharashtra, Tamil Nadu and Karnataka resulting in a fall

3


31/200

in sugarcane production, delayed payment of cane price and closureof some sugar mills. However, considering the increasing price ofsugar in the international market, the Indian sugar industryencouraged the sugarcane farmers to plant more sugarcane.Accordingly, there was substantial diversion of area from other cropsto sugarcane in anticipation of higher return. The area undersugarcane cultivation increased from 3.662 million hectares in 2004-05 to 4.201 million hectares and 5.134 million hectares in 2005-06and 2006-07 respectively. Sugar production increased substantiallyfrom 19.267 million tonnes in SY 2005-06 to 28.364 million tonnesin SY 2006-07 against domestic consumption of 18.945 million tonnesand 20.160 million tonnes in SY 2005-06 and SY 2006-07 respectively.Due to maximum sugar production in SY 2006-07, sugar exportsincreased substantially from 1.661 million tonnes in SY 2006-07 to4.957 million tonnes in SY 2007-086.

1.10 The production of gur (including khandsari) in India substantially

decreased from 98.62 lakh tonnes in 1992-93 to 56.94 lakh tonnesin 2002-036 . This could be attributed to diversion of utilisation ofsugarcane for manufacture of white sugar on account of changeddemand pattern.

1.11 The number of sugar factories in operation in India increasedfrom 416 in 1995-96 to 455 in 2005-06. However, due to maximumproduction of sugarcane, in 2006-07 followed by 2007-08, thisnumber increased to 504 and 516 in 2006-07 and 2007-08respectively. As against the installed sugar production capacity of189.85 lakh tonnes in 2004-05, utilisation of capacity was only 67per cent. The lower utilisation of sugar production capacity during

2004-05 could be attributed to lower sugarcane production and higherinstalled sugar production capacity. However, in 2006-07, as againstthe installed sugar production capacity of 213.91 lakh tonnes,utilisation of capacity was of the order of about 133 per cent. Thehigher utilisation of sugar production capacity during 2006-07 couldbe attributed to maximum sugarcane production.

1.12 The sugar export from India increased substantially from 8.87lakh tonnes in SY 1995-96 to 49.57 lakh tonnes in SY 2007-08. Thesugar import into India increased substantially from 0.42 lakh tonnesin SY 1995-96 to 1.24 lakh tonnes, 5.53 lakh tonnes and 16.00 lakhtonnes in SY 2002-03, 2003-04 and 2004-05 respectively6. Thus,during the SY 1995-96 to SY 2007-08, the quantity of sugar exportedwas substantially higher than what was imported.

6. National Federation of Co-operative Sugar Factories Ltd., New Delhi, Co-operativeSugar, Vol. 40, No.10, June 2009

4


32/200

1.13 Sugar exported from India increased from 2000 tonnes (valuedat Rs.0.91 crore) in the financial year 1990-91 to 16,62,370 tonnes(valued at Rs.1769.49 crore) in the financial year 2002-03 anddecreased to 12,00,600 tonnes and 1004317 tonnes in the financial

years 2003-04 and 2006-07 respectively, whereas sugar imported intoIndia decreased from 17,65440 tonnes (valued at Rs.2245.85 crore)in the financial year 1994-95 to 320 tonnes (valued at Rs.1.11 crore)in the financial year 2006-075 .

1.14 During the decade ended 2008, sugar export from India wasmaximum to UAE (5.40 lakh tonnes), followed by Bangladesh (3.74lakh tonnes), Pakistan (3.50 lakh tonnes), Sri Lanka (1.62 lakhtonnes), Malaysia (1.32 lakh tonnes) and Yemen (1.17 lakh tonnes)7.

1.15 The Government of India, vide its notification dated July 04, 2006had banned export of sugar purportedly to check inflation caused byrising sugar prices. International Sugar Organization (ISO) assessedthe increase in sugar prices of different countries during October 2005to April 2006 and stated that the increase in domestic price of sugarin India is "a mere tepid 10 per cent in aggregate terms over the pastsix months" compared to 58 per cent in Brazil, 50 per cent in Russiaand 27 per cent in China". The Indian sugarcane farmers and thesugar industry which had suffered major losses during 2003-04 and2004-05 could recoup the losses incurred, by exporting sugar. Higherworld market prices make sugar export a viable proposition,particularly when excess stocks are available beyond local needs.

1.16 In India, sugar is a prime requirement in every household.Almost 75 per cent of the sugar available is consumed by sugar based

bulk consumers like bakeries, candy makers, sweet makers and softdrink and ice cream manufacturers. Industrial consumption of sugaris growing rapidly particularly from the food processing sector andsugar-based bulk consumers. A rising trend in usage of sugar couldbe attributed to greater urbanisation, rising standard of living andchange in food habit. While domestic consumption of sugar accountsfor 98 per cent of sugar production in India, export accounts for therest (long run average).

1.17 India is the world's largest sugar consumer. On the basis ofexisting trend of sugar consumption and population growth rate of1.6 per cent per annum, the estimated requirement of sugar by 2010

would be 24.3 million tonnes and the corresponding area required

7. National Federation of Co-operative Sugar Factories Ltd., New Delhi, Co-operativeSugar, Vol. 40, No.01, July 2009.

5


33/200

under cultivation would be around 5.5 million ha. The increase inarea under sugarcane cultivation from the level of 4.41 million ha. in2008-09 to 5.5 million ha. by 2010 may not be possible due to othercompeting crops, constant land area and water shrinkage and hencewill necessitate improvement in productivity of sugarcane and sugarrecovery, for which, research institutions have to play a very importantrole.

1.18 Khandsari sugar is less refined and is typically consumed bysweet makers. Gur is an unrefined form of lumpy brown sugar. It ismostly consumed in rural areas. Some quantity of gur is illegallydiverted for alcohol production.

1.19 The per capita consumption of white sugar in India increasedsubstantially from 4.80 kg in 1960-61 to 19.10 kg in 2007-08 andthat of gur and khandsari decreased substantially from 15.20 kg to4.50 kg during the same period.7

1.20 Molasses is the chief by-product of sugar industry and is themain raw material for alcohol production and alcohol-based industriesin India. The production of molasses in the country increased from6.5 million tonnes in 1994-95 to 13.11 million tonnes in 2006-07 anddecreased to 11.31 million tonnes in 2007-08.

1.21 The second by-product of sugar industry is bagasse, which isthe fibrous material left over after crushing. Sugarcane bagasse isthe chief source of power in the sugar mills. This is also being usedas a raw material in the paper industry. In most sugar mills, co-generation of power, using bagasse as fuel is considered feasible. It

has been estimated that about 3500 MW power can be generatedannually without extra fuel and with investment much less than thatrequired for generating the same through thermal power plants.8

1.22 The third by-product of sugar industry is pressmud, whichcontains many plant nutrients and could be an important source oforganic matter, major and micro-nutrients. By making use of by-products, many sugar factories have been establishing facilities toproduce power, alcohol, ethanol, bio-compost, etc.

1.23 Green tops of sugarcane are used as cattle feed. Sugarcane juicehas great demand particularly in urban areas, as a thirst quencher.

8. Http://www.ikisan.com/links/ap_sugarcane History.shtml

6


34/200

Need for the Study

1.24 The sugar industry in India finds itself entangled in a complexweb of problems leading to "declining profitability to the cane growersas well as sugar industries". The reasons for the same are to be tracedand suitably addressed to give a boost to this sector in the country.

Unlike many western or major sugarcane growing countries,sugarcane is the only source of sugar in our country and therefore,any mismatch between demand and supply of sugar in the countryassumes significance at the national level and influences theeconomics of sugarcane cultivation to a great extent. The initiativesby the state governments in the form of fixing a remunerativesugarcane price on one end and pressurising sugar mills to makepayments within a reasonable time on the other end encouragedfarmers to put in more area under the sugarcane crop. Thisunderlines the need to study the economics of sugarcane in order tounderstand the effectiveness of the price policy in determining the

area under sugarcane crop. The initiatives of research institutions,particularly of those directly involved with sugarcane crop are requiredto be listed in order to study the growth in productivity of sugarcanecrop. Further, the globalisation of the Indian economy started in early90s is bound to direct the trade of agricultural commodities in the

years to come. It is, therefore, necessary to study the status of Indiansugar in the export market with respect to domestic market. Keepingthe above aspects in view, it was felt necessary to conduct acommodity specific study on sugarcane in a few selected states ofIndia.

1.25 The present study was undertaken in the three selected states

viz., Karnataka, Uttar Pradesh and Haryana to trace the movementof sugarcane crop from the farm to the factory as also to the jaggery/khandsari production unit and of sugar and jaggery/khandsari fromthe sugar factory and the jaggery/khandsari production unitrespectively to the consumer, with the broad objectives ofunderstanding the nature of production conditions, highlightingdemand-supply mismatches, if any, and studying marketing and otherrelated aspects of sugarcane, sugar, jaggery and khandsari, includingtheir price behaviour.

Limitations of the Study

1.26 The findings of the study cover the three selected majorsugarcane growing states. However, since they are based on arelatively small sample, generalisation of the findings at macro levelmust be done carefully.

7


35/200

CHAPTER II

Objectives And Methodology

The present study was undertaken with the overall objective ofstudying production, marketing and other related aspects of

sugarcane, sugar, jaggery and khandsari including their pricebehaviour. The specific objectives of the study are as follows.

(1) To study the changes in area, production, productivity and pricesof sugarcane as also changes in production and prices of sugarand jaggery, domestically and globally

(2) To identify different entities in supply chain management fromfarm to the plate and study their effectiveness in terms of linkagesand efficiency, covering aspects related to availability of inputs,credit , extension services, marketing, etc

(3) To estimate the costs and returns from production of sugarcane, jaggery, sugar and khandsari and analyse the profitability ofproduction of these items

(4) To study the existing systems of marketing of sugarcane, jaggery,khandsari and sugar

(5) To study the role of different agencies in financing production ofsugarcane, jaggery, khandsari and sugar

(6) To study the aspects pertaining to demand for and supply of

sugarcane, jaggery, khandsari and sugar covering, inter alia,production, consumption, exports and imports

(7) To study the factors affecting the prices of sugarcane, jaggery,khandsari and sugar and analyse the price spread between theprices paid by the consumers and received by the producers of

jaggery and sugar

(8) To study the constraints faced by the sugarcane growers, jaggeryproducers, khandsari producers and sugar producers inproduction and marketing of sugarcane, jaggery, khandsari and

sugar and suggest possible ways of evolving an efficient supplychain for sugarcane

8


36/200

Methodology

Sampling Design

Selection of States

2.02 During the decade ended 2004-05, annual average area undersugarcane in India worked out to 4.14 million ha., out of which major

sugarcane growing states viz., Uttar Pradesh, Maharashtra, Karnataka,

Tamil Nadu, Andhra Pradesh, Gujarat, Haryana, Punjab and Bihar

together accounted for about 95 per cent. While the subtropical

region, covering the major states of Uttar Pradesh, Haryana, Punjab

and Bihar accounted for 58 per cent of the total area under sugarcane

in the country, the tropical region covering the major states of

Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and Gujarat

accounted for 37 per cent. Keeping in view, the higher and the lower

concentrations of area under sugarcane in the sub-tropical andtropical regions respectively, two states in the sub-tropical region viz.

Uttar Pradesh and Haryana and one state in the tropical region viz.,

Karnataka were purposively selected for the study.

Selection of Districts

2.03 In the selected three states, the study was conducted in seven

districts, having comparatively larger area under sugarcane crop and

accounting for a major share of sugarcane production. Thus, the

districts, which were purposively selected for the study were Mandya

and Belgaum in Karnataka, Azamgarh, Sitapur and Muzaffarnagar

in Uttar Pradesh and Yamunanagar and Kurukshetra in Haryana.

Selection of Blocks / Taluks, Villages, Sugarcane Growers and

Other Sample Units

2.04 A total of 233 sample units were drawn for the purpose of the

study from the study area in the three selected states [Table 2.1].

9


37/200

Table 2.1

Number of Sample Units Selected

Sr.No. Category No. of sample units selected in each state Total

Karnataka Uttar Pradesh Haryana

1 2 3 4 5 6

1 Sugarcane growers 40 90 60 190

2 Sugar factories (mills) 6 5 3 14

3 Jaggery (gur) producers 6 6 - 12

4 Khandsari producers - 1 - 1

5 Sugarcane Societies - 3 - 3

6 Commission agents 4 - - 4

7 Wholesalers - - 4 4

8 Retailers 1 - 4 5

Total 57 105 71 233

2.05 The details of sample units drawn in each state are as follows .

A. KARNATAKA

2.06 Two sugar factories viz., Shri Hiranyakeshi Sahakari SakkareKarkhane Niyamit (SHSSKN) in Belgaum district and SriChamundeswari Sugars Limited (SCSL) in Mandya district wereselected to represent two sugar factories functioning well. In the

jurisdiction of each sugar factory, 20 sugarcane growers including 10from nearby villages and 10 from distant villages were selected atrandom for the study. Nearby and distant villages were those whichwere at a radius of less than and equal to or more than 14 km.respectively from the factory, supplying sugarcane to the factory during

the sugar year 2005-06. The study covered 40 sugarcane growers in22 villages from two districts. The selected sugarcane growers in eachselected district belonged to two taluks.

10


38/200

2.07 In addition to 40 sugarcane growers, the study covered six sugarfactories - three in Begalum district viz., (i) The Ugar Sugar WorksLtd., [TUSWL], Ugarkhurd, Athani taluk, (ii) Shri HaranyakeshiSahakari Sakkare Karkhane Niyamit [SHSSKN], Sankeshwar, Hukkeritaluk and (iii) Shri Malaprabha Sahakari Sakkare Karkhane Niyamit

[SMSSKN], M.K. Hubli, Bailhongal taluk and three in Mandya districtviz., (i) Sri Chamundeswari Sugars Ltd., [SCSL] Bharathinagar,Maddur taluk, (ii) the Pandavapura Sahakari Sakkare Karkhane Ltd.,[TPSSKL] [Lessee : Kothari Sugars and Chemicals Ltd.], Pandavapura,Pandavapura taluk and (iii) The Mysore Sugar Company Ltd. [TMSCL],Mandya, Mandya taluk. Six jaggery units including two from Belgaumdistrict and four from Mandya district were also covered in the study.

The study also covered two commission agents from the AgriculturalProduce Market Committee [APMC] Yard, Belgaum and another twocommission agents from the APMC Yard, Mandya to understand therole played by them in the production and marketing of jaggery. In

order to study the price spread per quintal of sugar and jaggery i.e.,the difference between the price paid by the consumer of sugar and

jaggery per quintal and the price received by the producer of sugarand jaggery per quintal, a retailer who was involved in procurementand sale of sugar and jaggery was also interviewed.

B. UTTAR PRADESH

2.08 In each of the three selected districts, 30 sugarcane growers inthe vicinity of the selected sugar mills were selected for the study.

Thus, the study covered 90 sugarcane growers. From the selected

three districts, five sugar factories, three sugarcane societies, six gurmaking units [kolhus] and one khandsari unit were also selected forthe study.

C. HARYANA

2.09 In each of the two selected districts, a list of developmentalblocks as per productivity level of sugarcane was prepared inconsultation with the Department of Agriculture and two blocks - onewith high yield and one with low yield were selected for the study.

Thus, four blocks were selected for the study. From each selected

block, one village was chosen randomly. Fifteen farmers were drawnup from each village giving due weightage to different categories offarmers. Thus, the study covered 60 sugarcane growers. Three sugarmills - two from Kurukshetra district and one from Yamunanagar

11


39/200

district were also selected for the study. In each selected district,two sugar dealers / wholesalers and two retailers were also contacted.

Reference Year

2.10 The reference year of the study was the agricultural year 2005-

06 and the valuation of inputs and output were done at the referenceyear prices.

Collection of Data

2.11 The data for the study were collected from both primary andsecondary sources. Primary data from the selected sugarcane growerson production, marketing and financing aspects of sugarcane covering,inter alia, operational holding, costs and returns for the area put undersugarcane, availability of inputs, credit, extension services, marketingfacilities, etc. were collected by survey method, using the schedules

designed for the study. Data on costs and returns from productionof sugar, jaggery and khandsari were also collected, from producersof sugar, jaggery and khandsari respectively using the schedulesdesigned for the purpose.

2.12 Secondary data collected from different published sources /institutions covered various aspects related to financing of sugarcaneby institutional financing agencies, year-wise, district- wise, state-wiseand country-wise data on area, production and productivity ofsugarcane, production, consumption, export and import of sugar,marketing of sugar and other products, etc.

2.13 As a part of the study, discussions were held and data elicitedfrom different agencies, viz., Directorate of Sugar, The South IndianSugar Mills Association [Karnataka], Directorate of Economics andStatistics, Department of Agriculture, Office of the District StatisticalOfficer, Agricultural Produce Market Committee, District IndustriesCentre, Office of the DDM, NABARD, Office of the Lead DistrictManager, District Central Co-operative Bank, Commercial Banks,Karnataka Sugar Institute, Zadshahapur (near Belgaum), AgriculturalResearch Stations, State Agricultural Marketing Board, The IndianInstitute of Sugarcane Research, Lucknow, etc. Secondary data were

also elicited from the websites of CACP, RBI, Ministry of FoodProcessing Industries, APEDA, FAO, IMF, International SugarOrganization, Earth Policy Institute, Directorate of Sugar, CMIE,Directorate of Foreign Trade, etc.

12


40/200

Analysis of Data

2.14 Tabular analysis was adopted for analysing the data. The costsand returns from production of "planted" and "ratoon" sugarcane wereestimated on "per acre" basis. Net income from sugarcane productionwith and without the imputed value of family labour was calculatedby deducting the cost of sugarcane production with and without thevalue of family labour from the gross income. The costs and returnsfrom production of sugar and jaggery (gur) were estimated on "perquintal" basis.

2.15 The sample sugarcane growers in Uttar Pradesh and Haryanawere categorised into small and large farmers (possessing holdingsof less than or equal to and more than five acres) respectively andcosts and returns from sugarcane production were worked out for eachcategory.

2.16 For assessing the demand for sugar in the country as well as inthe globe as a whole, various estimates on production, consumption,export, import, etc., made by FAO were used.

13


41/200

CHAPTER III

Sugarcane, Sugar, Jaggery And

Khandsari - Production Aspects

In this chapter, an attempt has been made to present the productionaspects of sugarcane, sugar, jaggery and khandsari, with particularreference to the selected states. A brief note on some technical aspectsof cultivation of sugarcane as also production of sugar and jaggery inthe selected districts of Karnataka is presented in Annexure I.

A. KARNATAKA

Sugarcane Cultivation

3.02 Sugarcane is one of the most important commercial crops ofKarnataka. Though it can be grown in all types of soil, it can be grown

with great success in fertile, well drained black soil.

Package of Cultivation Practices

3.03 The package of practices for sugarcane cultivation evolved byZonal Agricultural Research Station, VC Farm, Mandya is as follows.

A. Varieties

3.04 While the varieties Co 419 is of 12 to 16 months duration, thevarieties Co 62175, Co 7804 and Co 8371 are of 12 to 14 monthsduration. There are three planting seasons viz., June to August,

October to November and January to February for the varieties Co419, Co 62175 and Co 7804 and two planting seasons viz., Augustto November and January to February for the variety Co 8371.

3.05 Seed material in the form of setts to be used for planting must beobtained from disease free sugarcane crop of eight to 10 months old.

B. Input Requirement per Acre

(i) Seed : 10000 to 12000 three-buded setts

(ii) FYM / compost : 10 tonnes

(iii) Nitrogenous bio-fertiliser : Azatobacter or Azospirillum : 1 kg.

(iv) Phosphatic bio-fertiliser : Bacillus megatarium

(phosphobacter) or Agrobacterium

radiobacter : 4 kg.

14


42/200

(v) Fertilisers :

(a) Nitrogen : 100 kg

(b) Phosphorus 40 kg

(c) Potash 50 kg

(vi) Weedicides(a) Atrazin 1 kg.

(b) Metribuzin 600 gm

C. Sowing

3.06 The land is to be ploughed two to three times and clods crushed.One-foot deep furrows are to be taken at a distance of three feet.Fertilisers containing 100 kg. nitrogen, 40 kg. phosphorus and 50 kg.potash are to be applied in furrows per acre of sugarcane and anirrigation given. Setts are to be planted, with eye buds facingsidewards.

D. Top-dressing

3.07 After planting, top-dressing with nitrogenous fertilisers may begiven three times. The top-dressing with nitrogenous fertilisers maybe given at 20 kg., 30 kg., and 40 kg. per acre after six weeks, 10weeks and 14 weeks after planting. Fertilisers are to be applied infurrows and covered with soil.

E. Bio-fertilisers

3.08 Bio-fertilisers can be classified under two groups - (a) nitrogenfixing bio-fertilisers and (b) phosphorus dissolving bio-fertilisers.Azatobacter and Azospirillum are nitrogen-fixing bio-fertilisers. Halfa kg. of one of these bio-fertilisers may be mixed with 50 kg. of welldecomposed FYM or compost and applied in furrows and covered withsoil 30 days and 60 days after planting. Use of nitrogenous bio-fertilisers contributes towards securing 15 per cent increased yieldof sugarcane. Azatobacter may be used in red sandy loam andAzospirillum in clayey and black soil. For planted sugarcane,Azatobacter is ideal and for ratoon cane, Azospirillum.

3.09 Agrobacterium radiobacter or Bacillus megatarium may beapplied, at four kg per acre, 30 days after planting and covered withsoil. Use of phosphatic bio-fertilisers contributes towards securing

15


43/200

10 per cent increased yield of sugarcane. Further, use of bio-fertilisers along with the pressmud of sugar factories is quite effective.Bio-fertilisers must not be used along with fertilisers or pesticides.

There is a need to conserve soil moisture for securing better resultsthrough the use of bio-fertilisers.

F. Irrigation and Inter-cultivation

3.10 Depending on weather, irrigation at an interval of eight to 10days in sandy soil and 10 to 15 days in black soil may be given. Itwould be better to avoid excessive use of water. Inter- cultivationmay be done after each top dressing. After the last top dressing,earthing up with a ridger may be done.

G. Inter-cropping in Sugarcane

3.11 Additional income can be generated through inter-cropping in

sugarcane with soya, french bean and any short-duration vegetablecrop. Fertility status of the soil can be improved through inter-cropping of sugarcane with leguminous crops, which would contributetowards increased yield of sugarcane.

H. Weed Control

3.12 One kg. of Atrazin [50 w p] or 600 g. of Metribuzin may be mixedwith 250 to 300 litres of water and the mixture sprayed to the soil,three to five days after planting. There must be sufficient moisturecontent in the soil at the time of spraying.

3.13 In case soya is inter-cropped with sugarcane, one litre of Alachlor[50 E.C.] weedicide may be mixed with 250 to 300 litres of water andthe mixture sprayed, three to five days after planting.

3.14 Important pests are (i) shoot borer, (ii) root grub and (iii) termite

3.15 The control measures for the above pests are as follows.

i. For control of shoot borer, eggs of trichogramma predators at5000 per acre may be released in six instalments every week,commencing from the fourth week.

ii. For the control of root grub, pesticide requirement per acr

nabard sugarcane report 2010

Documents