GS – III ‘Government Policies and interventions for development in various sectors and issues arising out of their design and implementation”.

• The Union cabinet has approved a comprehensive policy on excess sugar production in the country.
• Due to carry over stock the liquidity problem of sugar mills is likely to persist.
• In order to mitigate the problem, the cabinet has approved a package of over 5,500 crore rupees to support the sugar sector by way of offset.
• This cost is given as transport price subsidy which in turn will reduce the cost of production.

Major Challenges in Sugar Production:

• This cost is given as transport price subsidy which in turn will reduce the cost of production.
• One year there is excess production of sugar which in turn reduces the prices domestically and excess sugar is not exported due to global competitiveness the very next year the prices inflate due to low production (Cobweb Phenomenon).

Way Forward:

• This step is a way forward along with a comprehensive policy on ethanol but lot needs to be worked.
• Just like milk marketing done by clutch of cooperative federation, where profit goes back to federation, a similar structure should evolve and to organize farmer’s cane cooperative which in turn would have an equal in the sugar mills, which makes transfer very important.
• Even though government declares greater MSP the crop is sold at less price, so we must create a robust market infrastructure and price information system.
• Brazil which is the leading producer of sugar shifts its stocks of sugarcane to manufacture ethanol if the prices in global market slumps. Similar should be taken by sugar mills in India.

About Sugarcane:

• It is Grown as kharif crop in India.
• Temperature 21oC – 27oC and rainfall of 75-100 cm rainfall is favourable for sugarcane.
• Sugarcane grows in any soil which retains moisture, ideal soil for sugarcane is deep rich loamy soil.
• Major production areas are Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu, Punjab and Haryana.