Addressing 85th annual general meeting (AGM) of the Indian Sugar Mills Association (ISMA), Sharma said there is a need to make the industry self-sustainable for which it should diversify to non-sugar businesses.
Stating that there is a need to move away from "distorted policies", Sharma said, "We need to look at long-term perspective and move towards revenue-sharing formula instead of the current Fair and Remunerative Price (FRP) being fixed by the Centre for sugarcane."
He further said cane farmers would have earned additional "Rs 8,000 to Rs 9,000 crore" in the last 10 years if the state governments had adopted the revenue-sharing formula.
In 2012, the C Rangarajan Committee had recommended that there should be a sharing of the revenues/value created in the sugarcane value chain between the farmers and the millers in a fair and equitable manner. The Centre had considered the recommendation but left it to the state governments for adoption and implementation.
Stressing the need to diversify the sugar industry, the Commission for Agricultural Costs and Prices (CACP)'s chief said the industry should become dynamic and less dependent on the government.
The industry cannot survive if mills operate for 4-5 months during the crushing season and remain idle rest of the year, he said and asked mills to look at ways to diversify and ensure they operate for the entire year.
Since sugar consumption is not going to rise and production fluctuation continues to remain, the industry should focus on ethanol and co-generation businesses, he added.
The CACP chief further asked the sugar mills to establish more linkages with farmers and encourage them to shift to farm mechanisation to reduce labour cost, improve soil fertility through multi-cropping pattern and promote micro-irrigation.
Addressing the AGM, ISMA President Rohit Pawar appealed the government to adopt the revenue-sharing formula to determine the price of sugarcane and also create a Cane Welfare Fund to pay for the gap between the cane price as per revenue sharing formula and the FRP that the government wants to pay to the farmers.
In India, mills pay almost 90 per cent of their revenue realisation as cane price and there is a need to address this issue to remain competitive in the global market, he added.
On ethanol, he said the long-term policy on ethanol needs to be reviewed as it is difficult for the industry to commit ethanol supplies for more than 12 months because the production directly depends on sugarcane production, which is again dependent on rainfall, water availability and weather.
On export, Pawar said the government should penalise if mills fail to follow the quota fixed by the government. LUX HRS