Chandigarh, November 25
The drastic reduction in area under sugarcane cultivation in Haryana this year poses a threat to the working of 15 sugar mills in the state. With the sugarcane cultivation down by almost 40 per cent this year, most of the sugar mills will now be operating for only 50 per cent of the crushing season.

Officials in the agriculture department, Haryana, said the area under sugarcane cultivation had come down from 1.40 lakh hectares last year to 94,000 hectares now. However, estimates by the Federation of Cooperative Sugar Mills (Sugarfed) point out that the area reduction under sugarcane is much more and the cane availability will be reduced by over 40 per cent this year.

“The low availability of sugarcane this year will definitely impact the sugar production in the state. As against sugar production of 32 lakh quintals last year, we are expecting the production to co4me down to around 20 lakh quintals,” said a senior official in Sugarfed.

The less availability of cane means that 11 cooperative, four private and the HAFED sugar mill will not be able to utilise their capacities to the maximum and the number of cane crushing days in most mills will be reduced from the usual 150 days to 90 days. As against 330 lakh quintals of cane crushed last year by the cooperative sugar mills, only 170 lakh quintals of cane is available for crushing this year.

It is for this reason that most of the private sugar mills in the state have so far failed to announce the date on which they would start crushing the cane. Amongst the cooperative sugar mills, four mills have commenced operations, while the other seven will begin cane crushing by next week.

The main reason why most private mills have not started their production is the high state advised price (SAP) of cane fixed by the state government. Though the SAP had remained static for two years at Rs 138 per quintal for early maturing, Rs 128 per quintal for mid-maturing and Rs 126 per quintal for late maturing varieties, it has been hiked by over Rs 30 per quintal now so as to encourage farmers to grow more cane, rather than shifting to wheat and paddy.

However, this will adversely impact the fiscal health of the sugar mills, which have been running in losses, even when the SAP was low. Since the retail price of sugar remained static at Rs 180 per quintal, the high cost of production had made the business unviable.

“With the SAP being hiked to Rs 160-Rs 170 per quintal now, the cost of sugar production will go up to Rs 230 per quintal. Since sugar prices are controlled, the retail price will remain same (Rs 180 per quintal). So, most private mills are not willing to incur losses and are delaying the cane crushing. The cooperative sugar mills will run anyway because the state government has assured to pay Rs 80 crore (in form of loan) to Sugarfed for making payments to farmers,” said a senior official.