Chenna Despite good improvements in sugarcane area and yield in Tamil Nadu in recent years, fresh cane planting has taken a severe beating throughout the State due to the high cost of cultivation, according to N Gopala Ratnam, Chairman of Ponni Sugars (Erode) Ltd.

Sugarcane planting picked up well in Tamil Nadu over the last couple of years due to the resumption of monsoon and consequent improved water availability.

However, it is gathered that farmers’ interest in fresh cane planting in Tamil Nadu is now on the wane due to an abnormal rise in farm labour costs coupled with the re-emergence of competing crops enjoying better remunerative prices.

“Labour cost in Tamil Nadu is almost 2-3 times when compared with the rates prevailing in major cane-producing States like Uttar Pradesh. Effective cane price, including transport, for the Tamil Nadu mills is already far higher compared to their peers,” Gopala Ratnam said while addressing the company’s 27th annual general meeting.

This impedes and impairs Sugar Mills’ ability to further incentivise cane farmers through additional subsidies. Concerted efforts towards promoting mechanisation, improving cane yield, and enhancing the sucrose content through different cane varieties will be the company’s priority areas of pursuit to combat this challenge, he said.

Meanwhile, the ₹450 crore company is getting environmental clearance for its ethanol project.

Ponni Sugars was one of the early movers to conceive a 45 KLPD Distillery-cum-ethanol plant in June 2019 and obtain interest subvention support. However, it continues to face obstacles in obtaining environmental clearance.

Ethanol production is increasingly coming from B-heavy molasses and sugarcane juice instead of earlier production emanating from C-molasses. Hence, its ethanol plant must be housed within the sugar mill complex as an integral part thereof. Further, for its long-term sustainability, the project shall have a flexible product mix compatible with market dynamics in its configuration.

While the Government of Tamil Nadu in October 2021 relaxed the locational restriction for ethanol, it was not explicitly extended to cover the production of other allied products like ENA (extra neutral alcohol) and RS (rectified spirit). However, the Tamil Nadu government’s recent ‘Ethanol Blending Policy 2023’ seeks to comprehensively address the multifarious issues involved in ethanol projects. It also mandates the ‘consent to operate’ issued by the pollution authority to specifically cover ENA, RS, etc.

So, in sync with this policy, the company hopes its project will get the requisite environmental clearance. However, in the interim, it has lost interest in subvention support of ₹58 crore from the government for the ethanol project by lapse of time. It has decided to take a call on the ethanol project after securing environmental clearance.

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