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Sugar Industry in India - SWOT Analysis (Attributes (Cooperative Sugar…
Sugar Industry in India - SWOT Analysis
Attributes
Cooperative Sugar Mills - Majority of processing and intake of off the farm Sugarcane
525 mills produced more than 30 million tonnes of sugar from October to April. This makes India the world's largest producer, unseating Brazil.
Employs 50 million farmers and 0.5 million of skilled and unskilled mill workers
Processing of sugarcane generates bagasse, molasses and press mud as by- products.
Two major areas of production- Uttar Pradesh, Bihar, Haryana and Punjab in the north and Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh in the south.
Strength (S)
High Levels of Employment
50 million farmers
Around 1 million mill workers
Agriculture and allied industry still employs 48% of population- thus, expansion of sugar industry will decrease instances of disguised un-employment
has the potential to promote local entrepreneurship endeavors
Profitable peripheral commerce around the industry
By- products can be sold directly by farmers and mill owners to the government or other industries that process them
Bagasse
- It is the dry solid residue left over after crushing is done. It can be used as fodder to cattle, manure after degradation, for mulching the ground and for paper pulp.
Molasses -
It is the condensed syrupy liquid left after crushing and refining. It can be processed and converted into Ethanol, which can be added to the petroleum to make it a cleaner fuel.
National Bio-fuel Policy, 2018 envisages to make the best use of by- products offered by Sugar Industry.
Cultivation of Sugarcane is done as per the sustainable agro- climatic conditions although, irrigation facilities remain a perpetual problem in northern belt
Weakness (W)
Due to lax implementation of Minimum Distance Criteria (MDC), there is concentration of few sugar mills in large areas. This creates monopoly of mill owners and also, breeds corruption. Also, not to mention mill owners - political nexus
Sugarcane is a weight losing crop, ie. the weight of extricable mass is reduced upon transportation. Also, due to weak forward linkage from farms to mills, the sugarcane dries up and loses weight. Thus, profitability is reduced across the business chain
Low yield / Hectare : India - 64 T/ H and Hawaii - 121 T/ H
Sugarcane is a water intensive crop and it's cultivation is highly dependent on artificial irrigation. Due to lack of dry-land farming methods, it's cultivation faces the risk of unproductive yields with growing water scarcity.
Lack of PPP model and direct procurement by Private FMCG players exacerbates the dependency of farmers on mill owners.
Opportunity (O)
National Bio- Fuel Policy (NBP), 2018
Mixing higher percentage of Ethanol in petroleum will indirectly help the supply side economics of Sugar sector
Door- step collection of Bagasse must be initiated by GoI at local levels and farmers/ mill owners must be given good remuneration for it.
Since, this sector provides employment to around 52 million people, there is a need to increase R&D pertaining to sustainable cultivation, seeds, fertilizers, etc. Emphasis should be on making cultivation of Sugarcane climate resilient.
Contractual Farming and PPP Models must be promoted across the value chain
Deregulation of industry as to deciding the quantity of exports of sugar cane and finished products. This will help in dealing with demand- supply mismatch
Diligent implementation of C. Rangarajan Commission
Threat (T)
Global Warming and erratic rainfall patterns have made the yield more uncertain. Consequently, farmers must be given risk premium in the form of Insurance, basic pay (PMKSNY), etc
Competition with other cash crops
Change in perception of people with respect to health and NCD and CVD mortality. More and more people are giving up consumption of sugar.