CHAPTER 2 SUGAR INDUSTRY OF HARYANA

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1 CHAPTER 2 SUGAR INDUSTRY OF HARYANA 2.1 General Introduction India is called as the original home of sugarcane. Indians knew the art of making sugar since the fourth century. However the modern sugar industry in India dates back to mid-1930 s when a few vacuum pan units were establishing in the planes of Gangas and in the areas of Uttar Pradesh and Bihar. Until the mid-50s, the sugar industry almost confined to the states of Uttar Pradesh and Bihar. In early sixties the industry dispersed to southern India, Western India and other parts of Northern India. India is the biggest consumer and second largest producer of sugar in the world. The sufficient and timely monsoon rains, are a speedy population growth and substantial increases in sugar production capacity jointly have made India the largest consumer and second largest producer of sugar in the world. Indian sugar industry also plays the most important role in rural development. The sugar mills located in various parts of the country work as centers of development for rural areas by mobilizing rural resources and generating employment, transport and communication facilities. Over 45mn farmers and their dependents and a big quantity of agriculture laborers are employed in sugarcane cultivation, harvesting and subsidiary activities which are 7.5% of the rural population. The Indian sugar industry provide directly or indirectly employment to over 0.5mn skilled, semiskilled and unskilled workforce in rural India. 22

2 2.2 Raw Material for Sugar Mills The sugarcane is the only raw material for sugar mills in India. Although in some part of the world i.e. Brazil uses Beetroot as raw material for making sugar. The discovery of sugarcane, from which sugar is made as it is known today, is derived dates back unknown thousands of years. It is thought to have originated in New Guinea and further spread along Southeast Asia and India Sugarcane Production in India Sugarcane production areas in India can be classified into three regions: (a) Satluj-Ganga plain from Punjab to Jharkhand (b) Black soil area from Maharashtra to Tamil Nadu (c) Coastal Andhra Pardesh and Krishna Valley The sugar belt is limited to northern plains of the country, as it replaced indigo being the earlier cash crop of the region. The main reason is the fertile soil (clayed and lime-potash rich) cheap irrigation, leveled surface, cheap labour and availability of transportation system. Although in south the climatic conditions, sufficient irrigation system and new farming techniques have led to higher per hectare yield. But it has to compete with other cash crops such as groundnut and cotton. North India with 60% of cultivated area contributes to 50% of sugarcane production comparing to south India s 40% area contributing other 50% of sugarcane production.if we see at state level then Uttar Pardesh holds the top position in respect of area and production of sugarcane in India. It is followed by Maharashtra, Tamil Nadu and Andhra. 23

3 Table 2.1: Showing Acreage and sugarcane yield in India ( ) State Share of Sugar Share of Land area Production (%) used for production of sugarcane (%) Maharashtra Uttar Pradesh Karnataka Tamil Nadu Andhra Pradesh Gujarat Haryana Bihar Punjab Others (Source: New Delhi ET Bureau Nov 15, 2014) Sugarcane Production in Haryana In Haryana the sugarcane is produced mostly in the area adjacent to western Uttar Pardesh i.e. Yamuna basin. The state accounts for 4.13% of the total area and 2.84% of total production of sugarcane in India. There is practically no interstate trade of sugarcane. The sugarcane produced is consumed locally for Gur or Khandsari making and rest (approximately 60%) is sent to local mills for sugar manufacturing. A certain part about 10% is also consumed as seed for next year or in Chewing or by juice making vendors Production Area and Productivity of Sugarcane in Haryana The Haryana Sugar Industry makes a considerable part to the sugar production in India. The state has played a major role in meeting the demands of both domestic and global customers of the nation. The government protects the wellbeing of the 24

4 farmers growing sugarcane in Haryana by allocating the area for sugarcane procurement and also announcing its purchase price. The sugar producing area of Haryana lies along the borders of Uttar Pradesh. The state accounts for 4.13 per cent of the total area in the country for sugarcane and 2.84 per cent of total production of sugarcane in India. Here Ambala, Karnal, Kurukshetra, Jind, Sonepat, Rohtak, Gurgaon, and Hisar districts are the major producers. The CCS Haryana Agricultural University, Hisar is very active in research and has been providing good variety of seeds (Madhvi, 2014). 2.3 Sugar Manufacturing Process and Technology Sugar also known as sucrose, which is a carbohydrate that exists naturally in every fruit and certain vegetable. It is a most important product of photosynthesis, the process by which plants transform the solar energy into food. Sugar is extracted from sugarcane and sugar beets for commercial use. The process of separating natural sugar stored in the cane or beet root is known as refining. This process known for creating sugar, by crushing out the juice and then boiling at high temperature and converting it into crystals, was developed in India around 500 BC. Sugar Canes are shredded in crushers and compressed through a series of pressure mills containing grooved walls. A plenty of water is added as extracting fluid before squeezing to optimize juice yield at 95% to 97%. The extracted juice is treated with Calcium Phosphate and lime to precipitate the colloids. SO2 as a bleaching agent is next bubbled through until the ph is 7.0 to 7.1.This procedure provides maximum flocculation of impurities. Phosphoric acid or CO2 can be substituted as the acidifying agent. 25

5 The clarified liquor overflows to the evaporator and the underflow mud is processed on a continuous rotary press to recover sugar solution that is either passed further to the evaporator or passed backward to the thickener again if it is not clear. The filter cake is used for making fertilizer and the refined juice is concentrated to % water to 40% in a 3 or 4 effect evaporator with crystallization completed in a vacuum pot. Later on the mixture of syrup and crystal are separated via a high speed basket centrifugal. The syrup is re-concentrated and cooled successively to obtain one or more crops of crystals. The ultimate mother liquor is known as black belt molasses that is sent to distilleries for conversion to ethyl alcohol. Figure 2.1: Sugar Manufacturing Process 2.4 Indian Sugar Industry at a Glance The Indian sugar industry remains the second largest agro-industry in rural area after cotton textiles. About 600 functional sugar mills throughout India, about Five crore sugarcane farmers and a huge amount of agricultural laborers are engaged in 26

6 sugarcane cultivation and subsidiary activities; thus the sugar industry remains a powerful rural economy driver. Sugar trading in India is not easy as its price affects the household budget of common public in India, so it is a politically sensitive commodity. Currently all aspects of sugar industry whether it is its production, sales or the consumption all are under control system. However growing market pressure has made government look into partially decontrol the industry. Table 2.2: State wise Sugarcane Production State A.P Bihar Gujarat Haryana Karnataka Maharashtra Punjab Tamil Nadu U.P Others Total (Figures in 100,000 tons) Industry Structure Since the sugar industry in the country uses only sugarcane as input, sugar mills have been established in large cane growing state i.e. Tamil Nadu, Uttar Pradesh, Maharashtra, Karnataka, Punjab, and Gujarat. Uttar Pradesh leads the tally by contribution 24% of the country s total sugar production and Maharashtra is at second position with 20% contribution. 27

7 The farmers co-operatives own and operate the largest portion of the industry s total production capacity and these are concentrated mainly in western Uttar Pradesh and Maharashtra. The largest number of sugar mills in the private sector is situated in southern India, in the states of Tamil Nadu, Andhra Pradesh and Karnataka. Table 2.3: Sugar Production Statistics Sr. Particulars Crushing Season Number of Sugar Factories in Operation Crushing Capacity (million TCD) Sugarcane Crushed (million tons) Sugar Produced (million tons) Recovery % Cane Yield of sugarcane (tons per hectare) The Sugar Consumption in India In olden days people used to consume Gur and Khandsari in place of processed sugar. But with the passes of time more and more sugar is being consumed by the people in place of Gur and Khandsari. Whatever doctors and health experts may keep on advising but the sugar has eventually replaced other byproducts such as Gur, Sakkar and Khandsari. The Table 2.4 below makes it quite clear as how our traditional sweeteners have been replaced. We see that in last 50 years the total per capita consumption of all sweeteners has increased by 15%. And the most interesting picture is that the consumption of traditional sweeteners has decreased to one third and consumption of processed white sugar has increased by four times. It all includes the consumption of Sugar, Gur and Khandsari as it is or any product which has used these sweeteners. 28

8 Table 2.4: Showing per capita consumption of Sugar, Gur and Khandsari Year Per capita Consumption (KG per annum) Total Per capita Consumption (Kg per annum) Sugar Gur & Khandsari Sugar, Gur and Khandsari Future Prospect of Indian Sugar Industry There is practically no inter-state trade of sugarcane. Most of the sugarcane produced is consumed locally in gur making, khandsari or sent to nearby mill for the manufacture of crystal sugar. Normally India has been exporting a portion of its sugar production to Sri Lanka, U.A.R., Somalia, U.K. and the U.S.A. With increasing population the demand for sugar is bound to increase. Hence effective steps have to be taken to increase sugarcane production by introducing more and High Yield Variety (HYV) of the crop. The Sugarcane Research Centre under Central Sugarcane Committee is busy in developing new HYV seeds to increase the production of sugarcane. Similarly the Indian Institute of Sugar Technology at Kanpur provides training facilities in respect of sugarcane cultivation and sugar industry. By , sugar consumption in India is forecast to rise 31.3 million tons, while the production is estimated to be around 26.4 million tons, according to Indian Sugar Mills Association (ISMA). During , India's production stood at 24.4 million tons and consumption was 21.7 million tons. 29

9 According to ISMA, the increased usage brought about by the lifestyle changes due to the present surplus sugar production. The gross domestic product growth and lifestyle changes is said to increase demand for sugar and processed foods. Limited availability of irrigated lands and the increased construction activities on the farm lands by the major construction firms is also pulling down the sugarcane production capacity of the country. 2.5 Sugar Industry in Haryana The Sugar Industry of Haryana makes a noteworthy contribution to the sugar production in India. The sugar mills in the state have helped the state if not country in meeting the demands at domestic level. The government protects the interests of the sugarcane farmers by allocating the area for sugarcane procurement and also announcing its highest purchase price in India. Haryana has total 15 Sugar Mills; one mill is owned by the government controlled HAFED at Karnal and other on controlled by Haryana Sugar federation of cooperative sugar mills at Gohana. Ten sugar mills are in co-operative sector and three are run by private sector. The Saraswati Sugar mill at Yamuna Nagar in Haryana state is the largest sugar mill of Asia. It has the crushing capacity of MT. Most of the sugar mills in Haryana Sugar Industry are cooperative sugar mills in nature, like the rest of the country. It is estimated that the private sugar mills in Haryana crush about 2.6 cr quintals at the same time as the cooperative sugar mills crush more than 3 cr quintals per year. The most sugar mills of the Haryana are located in the eastern part i.e. near Yamuna basin. All sugar mills use the latest technology and machinery for production of the 30

10 best quality of sugar for the consumers. Sugarcane is cultivated in the state in very high volumes and which ensures that as much as possible all the mills have an easy access to raw material. The Ch Devilal Co-Operative Sugar Mill at Sirsa was just established with huge government funds and never utilized for crushing any sugarcane. As the area surrounding Sirsa had never produced sugarcane. Another sugar mill at Bhuna was closed in 2010 due to non availability of sugarcane in the region. The sugar mill at Meham is also at the verge of closing again due to no production of sugarcane crops in the region. Table 2.5: List of Sugar Mills in Haryana Sr. No. Name of the sugar mill District Type 1 The Bhuna Co-op. Sugar Mills Ltd. Fatehabad Co-operative 2 The Haryana Co-op. Sugar Mills Ltd. Rohtak Co-operative 3 The Jind Co-op. Sugar Mills Ltd. Jind Co-operative 4 HAFED Sugar Mill, Assandh Karnal HAFED 5 The Kaithal Co-op. Sugar Mills Ltd. Kaithal Co-operative 6 The Meham Co-op. Sugar Mills Ltd. Rohtak Co-operative 7 The Palwal Co-op. Sugar Mills Ltd. Palwal Co-operative 8 The Shahabad Co-op Sugar Mills Ltd. Kurukshetra Co-operative 9 The Sonipat Co-op. Sugar Mills Ltd. Sonipat Co-operative 10 The Panipat Co-op. Sugar Mills Ltd. Panipat Co-operative 11 Naraingarh Sugar Mills Ltd. Ambala Private 12 The Saraswati Sugar Mills Ltd. Yamuna Nagar Private 13 Piccadily Agro Industries Ltd. Karnal Private 14 The Haryana State Fed. of Co-op. Sugar Sonepat Co-operative mills Ltd. Gohana 15 Karnal Co-operative Sugar mills Ltd. Karnal Co-operative 31

11 2.5.1 Sugarcane and Sugar Production in Haryana The production of sugarcane has gone through variations due to the climatic changes and variations in monsoon rainfall in the state. In last ten years from to , we see that production of sugarcane has been as high as lacs qtls in and as low as lacs qtls. in Table 2.6: Showing Sugarcane and sugar production for last 10 years Year Sugarcane Production (lacs qtls.) Sugar Production (lacs qtls.) White Sugar recovery percent We see that the higher side was still less than the production of lacs qtls. in year Similarly the production of white sugar has varied from as high as lacs qtls in to as low as 7.5 lacs qtls in As an average 12% of the sugarcane is used for seed, feed and chewing and 28% is used for making Gur and Khandsari. Thus 60% of total sugarcane produced in the state goes to sugar mills for production of white sugar. 32

12 2.5.2 Sugar Cane Prices The state has been paying highest price to sugarcane growers to motivate them for more production of sugarcane. Along with the base price many times the state government declare bonus to the farmers. In the table 2.5 below we see that the prices are regularly been increased for last ten years from to And it is never due to pressure from the grower s, but it has been the policy matter of the government Table 2.7: Showing State Advised Prices for Sugarcane in Rs/qtls Year Early Variety Mid Variety Late Maturity (Source: Marketing Channel for Sugar The marketing of sugarcane produce is done in distinctively two ways. (1) Sugarcane directly sold to sugar factories which are used for production of white sugar. (2) Sugarcane juice is processed and Gur (Jaggery) is manufactured and sold to wholesale market. Two marketing channels for sugarcane produce is as below. 33

13 Channel 1: Producer Sugar factory Wholesaler Retailer Consumer Channel 2: Producer Processor (Gur) Wholesaler Retailer Consumer 2.7 Human Resource at Sugar Mills Sugar mills employ three types of staff for its operations. A few of them are permanent staff of the sugar mills such as Technical and maintenance staff, administrative and accounts staff. The second category is seasonal staff, which is employed only during the time the sugar mills are operative and third type of staff is hired on daily wages again mostly during crushing seasons. The information of sugar mills staff strength is given below. Table 2.8: Employees in Different Sugar Mills of Haryana Sugar mill Permanent Seasonal Daily Wagers Total Panipat Co-op Rohtak Co-op Karnal Co-op Sonepat Co-op Sahabad Co-op Jind Co-op Palwal Co-op Meham Co-op Kaithal Co-op Gohana Sugrafed Piccadly Pvt Saraswati Pvt Naraiangarh Pvt HAFED Karnal Total Source: Primary Survey 34

14 We have taken the data of 15 sugar mills, where Saraswati Sugar Mill Yamuna Nagar is the largest sugar mill in Asia. The Bhuna sugar mill has been closed since Fourteen sugar mills have 8109 employees on roll including permanent and seasonal employees. 35

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