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A not-so-sweet proposition

Maharashtra farmers desert cane, setting the stage for higher sugar prices.

Written by Partha Sarathi Biswas | Pune |
Updated: December 3, 2015 7:32:21 am
sugarcane, sugarcane farming, Maharashtra government, sugarcane cultivation, Maharashtra water crisis, Maharashtra drought zone, sugarcane cultivation ban, sugarcane farming ban, maharashtra sugar industry, sugarcane farming, india news, nation news The impact of low cane plantings by farmers in Maharashtra this time, on account of drought and unpaid arrears from sugar mills, will be felt in the next crushing season from October 2016.

Kiran Deshmukh didn’t plant any cane this time during September-October, the usual time for the 15-month ‘pre-seasonal’ crop that would be ready for crushing in the ensuing 2016-17 sugar season (October-September). Nor has he chosen to take the ‘ratoon’ crop growing from the stubble of last year’s harvested plant-cane and capable of maturing within 12 months.

This farmer from Barad village in Mudkhed tehsil of Nanded district in Maharashtra’s Marathwada region has two main reasons for skipping cultivation of cane in his four-acre field for the first time in many years.

The first is a severe water crisis accompanying two successive drought years in Marathwada: rainfall in this region was 40 per cent below normal in the current monsoon season (June-September) on top of last year’s 42 per cent deficit.

The second reason is non-payment of even the basic ‘fair and remunerative price’ (FRP) fixed by the Centre for cane supplied in the last 2014-15 season.

sugar

“I sold 36 tonnes to the Bhaurao Chavan Sahakari Sakhar Karkhana (a cooperative sugar factory founded by former chief minister Ashok Chavan) and haven’t yet received the minimum FRP of 2,264 per tonne for last year,” complains Deshmukh.

He isn’t the only farmer in Maharashtra to desert cane, even as mills have started crushing for the new 2015-16 sugar year with payment arrears of around Rs 1,000 crore against the crop of 2014-15.

According to the state government, only 9.83 lakh hectares have come under cultivation of cane for crushing this season, as against the 10.53 lakh hectares in 2014-15. The total cane available for crushing is likely to fall to 887 lakh tonnes (lt), from the 930 lt of 2014-15, with a corresponding decline in sugar production, too, from the record 105 lt of last year to 85 lt this season.

Millers, however, expect an even sharper drop. “Our figure for sugar production in 2015-16 is 75 lt,” says BB Thombare, chairman of the Osmanabad-based Natural Sugar & Allied Industries Ltd and president of the Western India Sugar Mills Association.

Interestingly, crushing data for this season so far shows production to be higher than last year. As on November 30, the 157 mills that were operational in Maharashtra had crushed 127.01 lt of cane and produced 12.25 lt of sugar during the 2015-16 season. The same period for 2014-15 had seen only 156 factories cumulatively crush 119.64 lt of cane and produce 11.21 lt of sugar.

But these numbers, Thombare believes, are misleading. Last year, most mills began crushing after November 15, whereas this time they started in October 15. “Farmers have harvested their cane early this time, because there is very little water and they are afraid their crop will simply burn if left in the fields too long. Mills similarly have advanced crushing operations, as there may be no water available later on to run their plants,” he points out.

Thombare projects crushing operations for 2015-16 to be over by end-January in Marathwada and by February-end in Ahmednagar and Solapur districts that are also reeling under drought. In the rest of Maharashtra — mainly Kolhapur, Sangli, Satara and parts of Pune and Nashik — mills may continue crushing till March-end.

By contrast, in 2014-15, mills in Marathwada crushed till end-March, while working right up to April-end in the other cane-growing regions of the state. “You will see a declining trend in production as the season progresses,” adds Thombare.

Bipin Kolhe, chairman of the Sanjivani Sahakari Sakhar Karkhana in Ahmednagar’s Kopargaon tehsil, notes that Marathwada, Solapur and Ahmednagar together contribute 60 per cent of Maharashtra’s sugar production.

“Farmers here are finding it a real challenge to keep their cane alive. This crushing season may turn out to be one of the shortest the state has ever seen,” he states.

The want of water, in combination with non-payment by mills, has also led to farmers in many places using their cane as fodder for cattle, rather than sending to factories for crushing. “That way, we will at least save on transport cost and ensure our animals don’t die,” remarks Kisan Shinde, who cultivates cane on five acres. Last year, this farmer from Kuntephal village of Latur tehsil/district supplied 60 tonnes to the Manjara Shetkari Sahakari Karkhana, promoted by the family of another ex-Chief Minister, Vilasrao Deshmukh. While Shinde did get the FRP (“which does not cover my input costs”), the payment came with a delay.

It is estimated that around 25 per cent of this year’s cultivated cane in Maharashtra will be diverted for fodder.

But 2015-16 is only the start. The real impact of lower cane plantings this year will be visible only in the coming 2016-17 sugar season.

There has been marked reduction in plantings of both pre-seasonal cane and the longer 18-month ‘adsali’ crop sown during mid-June to end-August — particularly in Marathwada, Ahmednagar and Solapur. While the precise extent of acreage decline is still to be determined, Thombare says he won’t be surprised if Maharashtra’s sugar production in 2016-17 plunges below 50 lt.

Maharashtra accounted for over 37 per cent of India’s 283 lt sugar output in 2014-15. The large year-to-year fluctuations in its output — unlike Uttar Pradesh, where both cane area and sugar production is relatively stable — makes Maharashtra the real “swing state” for the sweetener.

Kolhe reckons that the sugar produced in 2016-17 may not suffice to meet domestic requirement.

And that could set the stage for a firming up of both domestic and global prices by the middle of next year.

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