Ban on New Sugar Mills in Maharashtra

On 19 April 2016, the state government in Maharashtra announced a ban on sanctioning new sugar mills in drought-hit Marathwada district. The decision was prompted by severe drought and drinking water crisis in the state.

Key Facts

• The decision is in line with recommendations of Madhav Chitale Committee, set up by previous Congress-NCP Government.
• Of the 202 sugar mills in Maharashtra, 40% are in Marathwada region which comprises of eight districts of Maharashtra viz. Aurangabad, Jalna, Beed, Parbhani, Latur, Hingoli, Osmanabad and Nanded.
• Maharashtra is largest sugar producing state of India {Uttar Pradesh is largest sugarcane producing state}. Maharashtra accounts for 32% of the total sugar production.
• Government has also made drip irrigation compulsory for all sugar mills across state. As of now, only one third of the mills have adopted drip irrigation. Most sugar mills and growers draw water from dams. However, this also poses a dilemma for the government because growers using drip irrigation demand higher subsidy. It was reported that Maharashtra was looking towards Israel for low cost drip irrigation technology.

Questions to Analyse

• Is Sugarcane responsible for Marathwada drought?
• Is the government decision justified?

Is Sugarcane responsible for Marathwada drought?

There is no doubt that sugarcane is a water guzzling crop and needs around 2100-2200 mm/year of water per hectare. This is much more in comparison to Marathwada region’s normal average annual rainfall of 821.6 mm. But since it is a long duration crop and produces huge amount of biomass, some argue that sugarcane consumes less water on daily basis and for every unit of biomass produced in comparison to other staple crops or cotton.

However, the problem is visible when there is a drought in the region. There has been a constant need for a balanced crop pattern in the region as per soil heath and water availability.  The Chitale committee in the state had said that: “There cannot be any justification for allowing so many sugar mills in Marathwada. As a uniform rule, the government should ensure that any district with less than 700 mm rainfall should not be allowed sugarcane cultivation.”

Some in Industry also argue that: “For every tonne of sugarcane we crush, we get 700 litres of water, which is then used in processing, cleaning and then released for irrigation”

Is the government decision justified?

The recent government decision seems to be a knee-jerk reaction to furore in media. The logic behind the move is to discourage cultivation of the water-guzzling crop, but banning new mills seems to be of symbolic importance. There are several reasons for its being symbolic:

• Most investors have no major plans for investment in Marathwada in sugar mills currently, nor appear to have in near future.
• Eight districts of Marathwada account for 17-18% of Maharashtra’s sugar production. The largest contribution comes from six western districts rather.
• Sugar mills neither require water nor electricity from outside; these are present either directly in the cane or generated as a by-product.

In summary, it appears that the move was hasty political decision and core issue of rational water conservation / use has not been addressed.