Sugar loses sweet touch

If sugar gets any costlier, tea-drinkers may have to look for sugar substitutes like Stevia, the herbal sweetener, to add taste to their cuppa.

A combination of cupidity, stupidity and bad luck has tripled retail rates in two years, without passing on benefits to the farmers.

The immediate problem arises from the well-known fact that acreage under sugarcane has shrunk in recent years, reversing a trend that saw a steady increase in area under the crop since the 1950s, peaking in 2006-07 at 5.15 million hectares.

This was compounded by last year’s weak monsoon which caused a 20 per cent shortfall in production and even more by a questionable trade policy — incentives for sugar exports at a time when global prices were at rock bottom and imports when they were at a 28-year high.

Exports continued even after the shortage began to be felt and interventions that may have stabilised prices were delayed,
allegedly for political reasons.

The government’s panic-mongering last year — it declared that sugar prices would increase due to lower output — sparked off furious imports at high rates and encouraged hoarding and speculation. In the process, it pushed up global prices, the stock prices of sugar manufacturers and the retail rates of sugar.

While policy failures have exacerbated the problem, the central fact is that farmers are opting out of sugarcane because it is no longer economically viable.

Currently, paddy and wheat offer better returns thanks to sharp increases in the minimum support price (MSP) over the last three years. The challenge before the central government is to ensure that farmers (rather than sugar mills) get a fair price for sugarcane.

The farmers of Uttar Pradesh brought this sharply into focus when they descended on the capital protesting the centre’s very low FRP (fair and remunerative price) for sugar cane —  Rs129 per quintal against the state advised price (SAP) of Rs165 per quintal.

Punjab and Haryana have hiked SAPs to Rs200 per quintal and
the Centre must follow suit. Farmers may not be content even with that. They charge sugar mills with profiteering and contend that sugar prices are all out of proportion to what the farmer receives — and the consumer pays.

Farmers preferred to sell to gur units which pay as much as Rs250 per quintal, rather than the mills, many of whom delay payments and shortchange them.

The proposal to force the farmers to sell to the mills rather than the gur units is both unconstitutional and undemocratic and is unlikely to solve the problem.

For farmers, sugarcane, being a water-intensive crop, is getting steadily harder to grow. The cost of inputs, particularly energy (for pumping water) and agro-chemicals, is going up.

At the same time, sugarcane productivity or yield per hectare is declining. From 1995 - 2000, it averaged around 700 quintals per hectare, but from 2000 to 2005, productivity was closer to 650 quintals per hectare.

A World Bank study on the impact of climate change on agriculture in India predicts a contraction in sugarcane cultivation by as much as one-third and advises a focus on drought-resistant crops.

Sorghum (jowar), for instance, takes a lot less water. Sugar can be
obtained from sweet sorghum. The National Research Centre for Sorghum has suggested use of sweet sorghum for obtaining ethanol fuel, currently extracted from sugarcane. Sugarbeet is another option.

Adoption of sensible agricultural practices, like revival of drought-resistant varieties of sugarcane, can also make a big difference. In some parts of India, farmers still successfully practice rain-fed cultivation of sugarcane (overall 92 per cent of the area under sugarcane is irrigated).

To make sugarcane cultivation more economically viable for farmers, agri-scientists suggest intercropping with pulses like a short-duration green gram (moong) crop.

Not only does the farmer benefit from the green gram, but the crop residues enhance the growth of sugarcane by improving soil fertility and moisture retention. Thus, the growing shortage of pulses can be addressed.

Organic cultivation of sugarcane is advisable in conditions of water stress, as it requires less irrigation. Interestingly, the Reserve Bank of India’s College of Agricultural Banking made the following observations (based on a study by the Gokhale Institute, Pune of sugarcane farmers of Jalgaon): “Organic Agriculture will result in increased surpluses at the farmer level, more due to a better bottom line even with a reduced top line. The improved bottom line will not be from a so-called organic premium but rather from reduction in costs”.

Currently, India has the world’s sharpest sweet tooth. It consumes some 23 million tonnes of sugar per annum. Not surprisingly, it also leads in the number of diabetics.

There seems to be no slackening in demand, even in a time of spiralling prices. Trends indicate that production has no way of keeping pace with demand, without sweeping policy changes. Stevia, anyone?

The writer is a commentor on social affairs