Despite dues from sugar mills rising, sugarcane growers in the country appear to be undeterred by delayed payments and a depressed market, according to the latest data on Kharif crops acreage released by the Agriculture Ministry here on Friday.
The area under sugarcane has already increased marginally over the corresponding period a year ago. As on Friday, 40.18 lakh hectares (lh) have been brought under sugarcane in the country against 39.98 lh.
Increased coverage has been reported in Uttar Pradesh (0.38 lh), Madhya Pradesh (0.43 lh) and Gujarat (0.19 lh) while it declined it Maharashtra (0.61 lh), Bihar (0.36 lh), Tamil nadu (0.15 lh), Andhra Pradesh (0.13 lh), Haryana (0.11 lh) and Karnataka (0.09 lh), among others.
Sturdy crop
The main reason cited by farmers for sticking to growing sugarcane despite arrears rising to Rs. 22,000 crore, as of April 15, is because the crop is sturdier than, say, wheat or potato, in the face of vagaries of the weather. UP alone owes Rs. 9,700 crore to farmers.
“It (cane) can withstand heavy rain and hailstorms which affected a lot of the standing wheat crop over the last two months. However, despite the (Allahabad) High Court order stating that payments need to be made within 14 days of procurement, that still isn’t happening,” said Kuldeep Tyagi, who grows cane across two acres of his 4-acre farm in Khaspur village, Meerut district in UP’s fertile western belt.
Another farmer in the same area, who did not wish to be identified, claimed that just one company – Mawana Sugars, which announced closure of its mills in March – owed around 40,000 farmers nearly Rs.450 crore, of which Rs. 125 crore was pending from last season.
An industry official, however, said that despite payments being made late, the returns from sugarcane outstripped that from other crops.
Better returns
The UP government, for example, set a State Advised Price of Rs. 280/quintal against the Centre’s Fair and Remunerative Price of Rs. 220. The minimum support price (MSP) for wheat, the other major crop grown in the State was Rs. 1,450.
“Farmers have confidence in cane as a crop. Not only is it more weather-resistant, the kind of money they are paid, although slightly late, still puts them in a better position vis-à-vis other crops,” said an industry official.
Depressed market
Production in the country, the world’s second largest sugar manufacturer, is slated to touch almost a decade high of 280 lakh tonnes (lt), since 283.6 lt was recorded in the 2006-07 sugar season (October-September).
As of April 30, mills had produced 273.74 lt which was around 14.3 per cent higher than at the same time the previous year when output was pegged at 239.43 lt, according to data provided by the Indian Sugar Mills Association (ISMA).
Ex-factory realisation in UP, the country’s second largest sugar producing State, firmed by Rs. 50/quintal over the last 20-25 days and is currently Rs. 2,700-70.
Prices have remained depressed, said industry sources, primarily due to the cost of production exceeding returns from sales of the sweetener.