Business Today

Sugar Goes Sour

A glut has kept sugar prices low. The resulting arrears to farmers have become a headache for the government in an election year. Can it fix the problem?

The nip in the air and the hazy skyline in October are tell tale signs of onset of winter in northern parts of the country. In India's most populous state, Uttar Pradesh, there is one more giveaway long queues of tractors on highways overloaded with the perennial sturdy grass, sugarcane. Around this time of the year, this is a common spectacle in two other big states Maharashtra and Karnataka as well. The three states, between themselves, produce almost 80 per cent of sugarcane grown in India. The crop's popularity with farmers has made India the world's second largest sugar producer after Brazil.

However, the farmers are unhappy. In the last two years, India has been producing far more sugar than it consumes. A glut in global markets means exporting excess production is not easy. The 50 million farmers who grow sugarcane in the country are facing the brunt of this.

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