An Empirical Study of Constraints Faced by Farmers and Sugar Mills in the Sugarcane Industry in India

Abstract

The sugarcane industry is a key part of the rural Indian economy but significant structural and institutional bottlenecks remain a part of it. India, which is the second-largest sugarcane grower in the world, has an organised procurement and pricing mechanism. This paper empirically determines and ranks the major production and marketing limitations observed by the sugarcane cultivators and operational and financial limitations constraints faced by sugar mills in two large sugar producing districts- Shamli (Uttar Pradesh) and Ahmednagar (Maharashtra). Primary data were gathered and the Garrett Ranking Technique was used. Findings have shown that the most serious production issues are high input prices and among marketing challenges, late payments and lack of marketing options were crucial. In the case of sugar mills, high costs of cane procurement become bottlenecks. The study suggests that the cane pricing mechanisms should be rationalised, the access to cheap inputs and extension services should be promoted as well as the financial support mechanisms should be strengthened to make the sugarcane value chain sustainable.