Sugar industry in crisis, next year will be worse, warns Harshvardhan Patil

The sugar industry in the country and in Maharashtra is passing through unprecedented financial difficulty. Harshvardhan Patil, former Cooperation Minister and president of the National Federation of Cooperative Sugar Factories, has warned that next year will be even worse. He spoke openly about the curbs on ethanol production, higher sugar prices, sugarcane farmers and sugar factories.

According to Patil, the turmoil over ethanol has already changed the sugar calculation. Sugar has become costlier, and repeatedly changing policies and drought have posed a major challenge to the industry.

He said the farmers who grow sugarcane and everyone connected with them are in trouble. Banks and institutions that lend to the industry could also be caught, as the loans will not be repaid on time, Patil said. He also voiced concern that the entire economic cycle could be at risk.

Drought has challenged many industries this year, and Patil spoke on this too. In his view, sugarcane production will be 25 per cent lower than last year. He said doubts are now arising over whether there will be a shortage of sugar. He demanded that farmers be given a direct subsidy of Rs 1,000 per tonne. He asked who would meet the country's requirement of 280 lakh metric tonnes if farmers did not plant cane. Even if sugar were imported, the cost would be considerably higher. Patil said the situation next year is worse still, because cane has not been planted accordingly. He also reminded that the country needs 320 lakh metric tonnes of sugar in 365 days.

Patil appealed to the government on the ethanol ban. He said this is the farmer's business, and if sugar policy keeps changing every season, the industry will not survive. According to him, the government itself had brought out the scheme to increase ethanol. Then a circular was issued saying molasses would not be taken, so what would producers do, he asked. There is no market for rectified spirit. Patil said the industry gives the government Rs 14,000 crore in revenue, but this policy would end that too. The government also stands to lose, and financial institutions will be in difficulty. He said the ethanol ban is not just a matter for factories, and the blow is being felt by the entire national economy. He asked the government to look at it seriously and find a way out. He said this is the only industry with so many components directly and indirectly linked to it, so the demand should be attended to immediately.

Patil has put the following demands to the government for the sugarcane industry:

A subsidy of Rs 1,000 per tonne should be paid directly into the farmer's account.

Soft loans should be made available.

The minimum selling price (MSP) of sugar has not been raised in 8 years and should be increased to Rs 47 to 48.

Most important, some production should be permitted despite the ban on ethanol.