Sugarcane production in India shifting from South to North: NSO report

Although Maharashtra is the leading sugar producer in the country, Uttar Pradesh has the highest sugarcane output value in the country

Six sugarcane-producing northern Indian states saw a 42 per cent increase in their output value between 2011 and 2020 while that of five states from the south declined 32.4 per cent during the same period, according to the latest National Statistical Office (NSO) report.

The report, consisting of data on output value from agriculture, forestry, and fishing shows the cumulative production value of sugarcane in Bihar, Haryana, Punjab, Madhya Pradesh, Uttar Pradesh, and Uttarakhand increased from Rs 30,216 crore to Rs 42,920 crore in real terms over the decade.  

Meanwhile, the sugarcane output in the five southern states of Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, and Maharashtra declined from Rs 26,823 crore to Rs 18,119 crore in the corresponding period.

This northward shift in sugarcane production is on account of larger irrigated area in the region and higher State Advisory Price (SAP) over and above the Centre’s Fair and Remunerative Price (FRP) being offered in the north, especially by Uttar Pradesh, said Mahendra Dev, director of Indira Gandhi Institute of Development Research.

For example, the UP government pegged sugarcane SAP at Rs 340 per quintal last year whereas sugarcane farmers in Tamil Nadu, Karnataka, and Maharashtra were only able to realise prices in the range of Rs 280-310.

Although Maharashtra is the leading sugar producer in India, Uttar Pradesh has the highest sugarcane output value in the country.

“Northern states like Uttar Pradesh have been consistently offering higher SAP for sugarcane over the past decade. Southern states, including Karnataka and Tamil Nadu, have moved away from SAP and adopted the revenue sharing model. But they are not able to realise a remunerative price as the mills have been reporting precarious financial situations. Moreover, they (southern states) are diverting their water to other high value crops,” said Dev.

Uttar Pradesh alone accounts for around 83 per cent of the output value among the six northern states and its output value grew 43.9 per cent from Rs 24,860 crore to Rs 35,770 crore over the decade, as the sucrose levels in the sugarcane produced in the state continue to increase, he said. 

Bihar, Punjab, Haryana, and Uttarakhand also saw their output value increase by nearly 35, 30, 23, and 10 per cent, respectively.  

In the southern states, Tamil Nadu saw the highest decline of nearly 66 per cent in the output value to Rs 1,855 crore, followed by Andhra Pradesh which saw a decline of nearly 63 per cent to Rs 730 crore.  

Barring Karnataka, which saw a marginal increase of 0.9 per cent in the output value, other sugarcane-producing southern states like Telangana and Maharashtra also saw their output value decline by nearly 50 and 27 per cent, respectively.

Data sourced from the Reserve Bank of India shows total sugarcane production in the five southern states has come down from 181.35 million tonnes (mt) to 130.65 mt during the 2011-2020 period while the production in the six northern states has increased from 161.7 mt to 222.51 mt.