Amit Savat, a young farmer in Maharashtra’s Sangli, is clear about the crop he wants to plant this Kharif season. He favours sugarcane. “I want to recover losses,” he says, after having suffered heavy losses growing vegetables over the past one-and-a-half years.

The Covid pandemic is one major reason for the losses suffered by vegetable growers in his region. Like Savat, many growers in his region have shifted from cultivating grapes to planting sugarcane.

Pandurang Chavan, a farmer from the Kolhapur region in Maharashtra, bets that “sugarcane is the safest crop in the current times of Covid”.

“Cultivation costs for other crops have multiplied and unseasonal rains, closure of markets, cost of pesticides, labour availability and affordability have remained major problems for farmers,” he says, justifying his cause to shift to sugarcane planting this year.

Maharashtra Sugar Commissioner Shekhar Gaikwad says that more farmers are shifting to sugarcane cultivation because of guaranteed income.

“Sugarcane is comparatively a better crop compared with others with good returns. It is even a lazy crop as once you plant and cut the cane you can be sure the mills will buy,” says Praful Vithalani, Chairman, All India Sugar Traders Association (AISTA).

Advantage

An advantage in the case of planting sugarcane is that growers need not worry. “It is the mills that need to worry about marketing sugar,” says Vithalani.

Ganpatrao Sawant, director of Sangli-based Vasantdada Sugar Cooperative, concurs with the AISTA chairman. “There is uncertainty in the market in view of the massive stocks sugar mills carry. They have to start the crushing season, but there are many mills that might face a financial crisis to start crushing the next season. Glut in sugarcane production will add to the problems of farmers and millers,” he says.

In short, the “safest” and “lazy” crop tag for sugarcane will likely lead to higher planting this kharif.

Stand-alone ethanol plants

The Centre’s policy to allow stand-alone ethanol plants and the insistence on they pay fair and remunerative price (FRP) to farmers may also encourage them to take up sugarcane farming more seriously, says an Uttar Pradesh Sugar Mills Association official.

The fact that sugar exports have been good this year besides the steady increase in the production of ethanol could be favourable for planting sugarcane, he says.

With Uttar Pradesh going to the polls next year, the State government would be more prompt in ensuring mills pay farmers on time as it would not want to antagonise such a huge vote bank on the eve of the polls.

Water availability

In Karnataka, the third largest sugar-producing state, sugarcane output is likely to increase by about five per cent aided by higher water availability and good pre-monsoon showers during the summer months.

RB Khandagave, Director, S Nijalingappa Sugar Institute in Belagavi, said the crop condition in Karnataka is good and the output would be higher by about five per cent.

Apart from good water availability, there is no report of pests attack or disease, which should help the production, he said.

Khandagave said the roadmap for ethanol blending announced by the Centre will provide a big boost for cane cultivation in Karnataka.

Vithalani says that sugarcane draws farmers as Indian growers are paid 30-35 per cent more than growers in countries such as Thailand.

Rahil Shaikh, Managing Director of MEIR Commodities-India, said that the sugarcane crop would be slightly higher than last year. “Sugarcane planting is on the verge of completion. We will get to know the exact closer to the peak monsoon period, but we expect higher acreage in Maharashtra and Karnataka,” he said.

Maharashtra, UP scenario

This season to September, sugar mills in Maharashtra have produced 106.3 lakh tonnes (lt) of sugar after crushing 1,012 lakh tonnes of cane with the crushing ending recently.

According to the Sugar Commissioner Office, farmers in Maharashtra cultivated sugarcane on 11.42 lakh hectares compared with 8.22 lakh hectares in 2019-20. An estimated 12 lakh hectares might come under sugarcane with most gains coming from central Maharashtra.

Kolhapur and Pune regions dominate sugarcane cultivation in the State. These two regions crushed 46 per cent of the sugarcane to produce 50 per cent of the total sugar in Maharashtra in 2020-21.

In Uttar Pradesh, farmers planted sugarcane over 23.98 lakh hectares this season, marginally higher than 2019-20. “We still do not know how much area will be covered this year. The survey is going on and we will get to know by early July,” said the UPSMA official.

Till May 31, Uttar Pradesh mills have produced around 110 lt of sugar for the current season that began in October.

Problem of arrears

Sugarcane acreage in Karnataka is likely to be the same as that of last year or see a marginal dip, said Kurubur Shantakumar, President of Karnataka Cane Growers Association.

Sugarcane is cultivated on 10 lakh acres in the State, he said.

Mills in Karnataka crushed about 353.45 lakh tonnes of cane during the current season, Khandagave said. Another 20 per cent of the cane was diverted to produce jaggery as well for seed purposes.

If there could be any problem with regard to sugarcane acreage, it is the money that mills owe to farmers who supplied sugarcane.

In Maharashtra, mills have paid a net FRP of ₹22,043.13 crore or 94.52 per cent of the total payable FRP. Mills have to pay ₹1,277.44 crore to farmers as of June 2.

On the other hand, the National Federation of Cooperative Sugar factories Limited has expressed concern over mills in the State selling sugar below minimum selling price of ₹3,100 per quintal. This has led to paucity of funds, which could affect payment to growers next season.

In Karnataka, the cane arrears are to the tune of over ₹1,000 crore for the current season, while there is an outstanding of ₹300-400 crore from the previous years, Shantakumar said.

Sugar output

The outlook of a higher sugarcane production comes at a time when this season’s sugar production has been estimated at 32.8 million tonnes (mt) with over two mt going towards ethanol production. Last season, production was 27.4 mt.

The USDA has projected that Indian sugar production next season would be another two mt higher, but it would result in India carrying forward a higher stock than the 11 mt projected this year.

The Indian sugar sector has been buoyed by government policy that gave transport and other assistance for exports. This has helped exports touch six mt this season compared with 5.7 mt last season.

The Centre came with a package that helped every tonne of sugar exported to get ₹6,000 as assistance compared with an average ₹9,750 last season.

The Union Government is estimated to have spent around Rs 3,500 crore this season as export assistance compared with ₹6,250 crore last season.

“Government policy will be the key to the sugar industry’s fortunes and growers’ welfare,” said MEIR Commodities’ Shaikh.

Pros and cons

While sugarcane is an easy crop to grow, it has its own pros and cons. The crop guzzles water. For example, farmers in water-starved Maharashtra use trillions of litres of water to cultivate sugarcane.

Though sugarcane accounts for only 4 per cent of the total cropped area in the western State, it consumes 70 per cent of the total water used for irrigation.

According to the Commission for Agricultural Costs and Prices (CACP), over 2,500 litres of water is consumed to produce a kg of sugar.

Also, sugarcane growers currently fetch 1.18 times return on their investment if the cane is planted. In case of ratoon crop, which is actually cutting the stem and leaving the root part intact, the growers fetch a return of 2.8 times their investment.

The CACP has said that the average net return for sugarcane growers is 10 times the realisation of cotton and gram put together.

With inputs from Radheshyam Jadhav, Pune; Vishwanath Kulkarni, Bengaluru; TV Jayan, New Delhi; and Subramani Ra Mancombu, Chennai)

(This is part of a series of Kharif Outlook reports that have been appearing in these columns since last week. The reports will continue to appear over the next few days.)

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