After hitting a peak in 2011 in terms of production and capacity use, the sugar inTamil Naduhas been down since 2016. The area under sugarcane fell with water scarcity and 15 of the 43 sugar mills in the state downed shutters.
The bountiful rain in 2021 has seen green shoots sprouting, but a turnaround is at least a couple of cutting seasons away. A hand from the government would help, say mill owners. This is an industry that caters to five lakh farmers, provides direct and indirect EMPLOYMENT to two lakh and generates around `4,500 crore in revenue.
Unlike in other states, mills in Tamil Nadu have a unique problem. The Centre fixes the Fair and Remunerative Price (FRP) per tonne at 9.5% recovery and including the farmers transport cost in bringing cane to the mills. But Tamil Nadu millers have to pay transport cost over and above FRP and the sugar they recover from a tonne of cane is also less.