Sugar sector contributes 8.45% to UP’s economy

Lucknow

The sugar and sugarcane sector, which sustains the livelihood of about 5 million farmers’ households in Uttar Pradesh (UP), contributes nearly 8.45 per cent to the Gross State Domestic Product (GSDP).

Its contribution to the agrarian state’s agriculture economy is pegged at 20.18 per cent or more than a fifth of the aggregate value of UP’s farm output.

According to the UP Budget, the state GSDP at market prices or nominal GDSP for the current fiscal year 2021-22 is projected at Rs 21,73,990 crore. (However, GSDP at constant prices, with the base year 2011-12, is lower by nearly a third of the nominal GDSP).

UP and Maharashtra are the top sugar-producing states in India, contributing almost two-thirds of the domestic output. For instance, in the current 2020-21 sugar crushing season, UP and Maharashtra have logged a sugar output of nearly 11 million tonnes (MT) each of the total 31 MT of India’s seasonal output so far.

Interestingly, the 119 UP sugar mills had continued to crush even during the long spells of lockdown 1.0 and 2.0, which largely supplemented the state farmers’ income and helped them overcome the crisis.

In the last four years, the state mills have crushed more than 387 MT of sugarcane, producing about 42 MT of the sweetener. Similarly, about 2.62 billion litres (BL) of ethanol has been produced in UP through 54 distilleries between 2017 and January 2021.

Meanwhile, the UP government has claimed it had facilitated the payment of Rs 140,000 crore to the cane farmers in four years during 2017-2021; more than the payments registered in 10 years (2007-17) spanning two previous governments helmed by the Bahujan Samaj Party (BSP) and Samajwadi Party (SP) respectively.

“The payments during the BJP-led UP government are twice the corresponding value of payments made during the former BSP government, and 1.5 times more than during the SP government,” a UP government spokesperson said on July 7.

While sugar payments to 3 million farmers aggregated Rs 52,131 crore in the BSP regime (2007-12), the corresponding payments to 3.3 million farmers in the subsequent SP regime (2012-17) topped Rs 95,215 crore.

“Apart from the current payments, the present regime also cleared arrears worth Rs 10,661 crore pertaining to the previous dispensation,” the spokesperson claimed.

Moreover, for the first time in 25 years, licences were issued for setting up 243 khandsari (unprocessed sugar) plants, of which 133 units have already been operationalized, creating fresh job opportunities in the countryside, especially in the current pandemic times.

The sugar mills, which were closed during the previous governments, are also being revived by the Yogi Adityanath regime, which has resulted in a higher number of cultivators adopting cane farming.

“The capacity of existing mills is being enhanced and they are being redeveloped as modern integrated industrial complexes to cater to the entire value chain, viz. sugar, molasses, ethanol, power cogeneration etc.,” the spokesperson noted.

(Virendra Singh Rawat is a Lucknow-based financial and economic journalist.)