Tamil Nadu sugar industry asks Centre to rework loans in wake of Covid-19

Some factories are not able to mobilise manpower and considering it is a very labour-intensive industry, this has affected operations
The sugar industry in Tamil Nadu has been hit by lack of manpower and transportation to harvest the cane owing to the lockdown, and has urged the Central government to restructure its term loans and sugar development fund loans. With drought hitting cane production the past few years, the industry will be introducing a new drought-resistant variety of the crop next year. The new strain will also have higher recovery and yield than existing varieties.

The industry is planning to talk to harvesting machine manufacturers to tweak the products to suit smaller fields, since the available ones are not suitable. Currently only five to six out of the total 40 private and public sector sugar factories in the State are working, not only due to the Covid-19 lockdown, but also due to the lack of cane availability.
"The season started very late due to lack of cane. We projected only 31 per cent capacity utilisation, which is nearly 700,000 tonnes of sugar. That works out to 6.5-7 million tonnes of sugar cane crushed with a recovery of around nine per cent, said  Palani G Periasamy, president of The South Indian Sugar Mills Association (SISMA), Tamil Nadu. 

Some factories are not able to mobilise manpower and considering it is a very labour-intensive industry, this has affected operations. To bring in 2,000-3,000 tonnes of cane per day to the factory, each mill needs at least 2,000-3,000 hands in the field. Due to the lack of mobility, the industry isn't able to get enoigh labour to cut the remaining cane. Besides, plans to scale up the cane planting activities have also been impacted.
"Even next year our production capacity may not be as expected. It may be about 50-60 per cent of the output this year. The recovery depends on when the lockdown is lifted," he added, saying that the transport subsidy announced by the government also not be enough.

As of today, the mobility of labour from one factory to another is the problem. Migrant workers are also not available. Unless there is some help on this front, the interest of the farmers will also be affected, Periasamy added.

In this situation, most factories will not be able to repay their loans as the servicing is based on optimum production, which has suffered. For the current sugar season, many factories have also finished crushing since cane availability was limited. The bulk of the crushing usually ends in April, continuing only in bits and pieces till September.

Some players have adapted to mechanical harvesting but haven't been too successfully because of the small land holdings. The current machine can harvest 100-200 tonnes per day, but is meant for larger fields. The land is not contiguous and transporting the harvest to another field is a cumbursome process. So the average harvesting would be around 100-150 tonnes per day, whereas the requirement of the factory may be 2,000-3,000 tonne on an average. The size of the harvester has to be reduced and the cost has to come down. There should be a fundamental change in the design to work in smaller lands, to reduce the dependence on the manual labour.

The industry has been developing a drought-proof, high-yield, high-recovery cane variety in conjuction with the Sugar Cane Breeding Institute of Coimbatore. Experiments are at an advanced stage and commercial production is likely to start next season. Currently the yield in Tamil Nadu is around 26-30 tonnes per acre and and the new variety is expectied to give around 40 tonnes. Recovery is expected to go up from the current 8.9-9 per cent to 11-12 per cent.


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