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Tamil Nadu sugar economy in big crisis’

Jun 14, 2019, 2:09 am IST


Tamil Nadu’s sugar production, which was 23.79 lakh tonnes in 2011-12 has hit a new low of 8.40 lakh tonnes per annum during 2018-19


Tamil Nadu’s sugar production has suffered a sharp decline, having been pushed from the fourth leading producer-state in India to the eighth slot now, particularly in the last seven to eight years, the TNCC president, Mr. K S Azhagiri has said.Tamil Nadu’s sugar production, which was 23.79 lakh tonnes in 2011-12 has hit a new low of 8.40 lakh tonnes per annum during 2018-19, making it a net sugar importer now and a fact which “does not seem to have even worried” the ruling AIADMK, Mr. Azhagiri said in a statement here on Thursday.


Both the sugar industry built on capacities for sugarcane crushing and the associated economy of the sugar-growing farmers has hit a plateau and all key stakeholders of the sugar economy in the State are facing a serious crisis, he said, adding, “but the AIADMK is more keen on discussing singular or dual leadership”.Setting out some basic facts which explains the dismal picture in the state’s sugar economy, Mr. Azhagiri said as the area under sugarcane cultivation is shrinking, eight private sugar mills and one cooperative sugar mills have stopped crushing sugar this year.  Even sugar mills that were operational, functioned to only one-third of their installed capacity, he said, adding, most private sugar mills unable to repay their bank loans have turned “NPA (non-performing assets) debtors.” Is it not the responsibility of the ruling AIADMK government to look into it, he asked.


Expressing concern that the sugar economy was in the “verge of collapse”, he pointed out that of the 43 sugar mills in Tamil Nadu - 25 in the private sector and 18 mills in the cooperative and public sector- , Azhagiri said they employ about 30,000 people directly, support jobs indirectly for 1.50 lakh workers, besides involving the livelihood of about five lakh sugarcane growing farmers. EID Parry which was a major segment of the sugar industry, was contemplating to close down two of its sugar mills, while Sakthi Sugars, Thiruarooran Sugars and Sri Ambika Sugars, have all reportedly decided to stop sugar production, he said.


As regards pricing of sugar, Azhagiri said Tamil Nadu has fixed a state-advised price of Rs 2612.50 per tonne for sugarcane, linked to 9.50 per cent recovery rate. But since on an average, the recovery rate in Tamil Nadu is only 8.90 per cent, the basic plus other auxiliary costs come to Rs 39 per kg of sugar produced for the mills. But the Central government has fixed the price of sugar at Rs 31 per kg, which has caused a ‘severe crisis’ for the entire sugar industry.At the same time, sugar mills in the State owed the farmers Rs 500 crore for cane already lifted for crushing, Mr. Azhagiri pointed out. While Tamil Nadu’s sugar requirement is pegged at 18 lakh tonnes, the state’s production was now of the order of only 8.40 lakh tonnes per year, he said, adding, from a surplus state in sugar production, it has turned a ‘deficit’ state. “We have to buy sugar from other states even to meet our PDS distribution in Tamil Nadu,” he said.


Charging the AIADMK government with not addressing these issues in earnestness to help resolve the crisis in the sugar economy, Mr. Azhagiri said, the present regime has been drifting for the last three years, pushing the sugar economy into a deeper crisis, particularly from the several lakh farmers point of view. The drought has hit sugarcane farmers most, but they are unable to apply for even drought relief due to the tweaking in the rules, said Azhagiri.If there was no effort to address all these issues facing the sugar economy in the state, the Congress and like-minded opposition parties, in consultation with sugarcane farmers associations, will launch a massive agitation against both the Central and State governments, cautioned Azhagiri.





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