NITI Aayog recommends major reduction in sugar cultivation

The central government’s policy think tank NITI Aayog has made a series of recommendations to reduce the area under sugar cultivation in the country, one of them being that the Centre should give incentive of Rs.6,000 per hectare to farmers to divert their land to other crops.

The NITI Aayog’s taskforce on agriculture, which made the recommendations, said that the total area under sugar cultivation can be brought down by three lakh hectares over the next three years provided farmers were given cash incentives.

Around 52 lakh hectares of land is currently under sugarcane cultivation in the country.

The taskforce recommended that sugar factories should also be allowed to buy only 85 per cent of sugarcane from farmers to discourage them from bringing more and more area under sugarcane cultivation.

It also said that the central government should stop maintaining buffer stocks of sugar. In 2018, the government announced the buffer stock scheme to stabilise the falling price of sugar due to excessive production.

Under the scheme, 12 per cent of the overall stock is left unsold in factory warehouses, which artificially raises the price of the commodity. The government bears the carrying cost, storage cost and insurance premium on the stock.

Agricultural experts predict there will be an opening stock of 112 lakh tonnes of sugar at the beginning of the crushing season, which begins in October and ends in March. It is expected that the closing stock at the end of the season will be around 93 lakh tonnes.

The sugar industry has opposed NITI Aayog’s recommendations. Prakash Naiknavare, managing director of the National Federation Cooperative Sugar Factories, told Mumbai Mirror: “The sugarcane is the only crop that gives double protection to the farmer. It guarantees him fair remunerative price and also marketing of his product (as factories buy his entire production). So unless the government offers such alternative for other crops, I don’t think farmers will enthusiastically accept its decision.”

One way of reducing production of sugar is to divert more and more sugarcane towards producing ethanol, he said. “The factories will do it happily as they get payment for ethanol from petroleum companies in only 21 days, whereas otherwise they have to hold on to their stocks for minimum seven to eight days before it is sold.”

Maharashtra produces around 33 per cent of sugar in the country. The sugarcane is the most important cash crop in the state with around 30 lakh farmers engaged in sugarcane farming. Out of 33 cabinet ministers in the state, 15 own and control one or more sugar factories in their district, both in private and cooperative sector.

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