Evaluate the primary factors contributing to regional disparities in the sugar industry between North India and Peninsular India. What measures can be undertaken to reduce the surplus sugar production?

Factors Responsible

1. Proximity to oceans/seas in south gives it advantage in form of elongated crushing season.

(sugarcane must be crushed in 48 hrs in north)

1. Cooperative networks

A) North India; mills are mostly Privately owned → lesser capital → low farmer welfare

B) South → Cooperatives & SHGs well established.

1. Thicker cane in South → Higher sucrose content is found in Peninsula due to higher moisture %. → This leads to thicker cane (more demanded)

2. Better Agro Storage & marketing → Investment by state government in cold storage, roads, etc. → tighter regulation of mills, etc.

3. Port Proximity → Gives Peninsula Export Advantage.

Question of Surplus Sugar Prodn?

This can be judged by recent fall in price of sugarcane in country. But, apart from overprodn, other factors:

1. Export Bans

2. Imposition of MEP (minimum Export Price)

3. Extreme incentives (MSP + SAP) FRP → extremely skewed incentive

Measures Required (Rangarajan Panel)

I) Reducing cane production itself

1. Incentivizing production of pulses, millets & oilseeds (Effective procurement, Agri Insurance)
2. Agri-Extension services to break initial inertia.

II) Overhauling cane production

1. Need to allow more to be diverted towards production of Ethanol (E-20 by 2030 target)
2. Diversification (Gur, khandsari, etc)
3. Trade deals & avoiding frequent MEP imposition