RETHOUGHT ABOUT DEVELOPMENT SYSTEM OF SUGAR INDUSTRY OF INDIA Dr. Pawan Verma
(Associate Professor), Shri Khushal Das University Hanumangarh, Rajasthan Atul Kumar
(Research scholar), Shri Khushal Das University Hanumangarh, Rajasthan
Abstract:- This paper has been consisted of a wide range of primary research surveys by used a structured questionnaire and semi structured interviews with the industry professionals on emerging issues over the value chain of sugar industry. The applicants were selected using purposive collecting in relation to the primary survey and it collected quantitative data has been verified on the lens of multiple stream modeling.
It was observed that the government being a central formulation has a deep presence in the entire value chain; mechanism of suppliers, marketing of sugar and expansion of infrastructure of the sugar industries. It is a problem of cost to cost. Instead of states autocratic policies, the sugar policies is based on correspondingly, rational and mutual benefits. The collective decisions and diversification by the government, industry management and the sugarcane producers. The choronological proposed solution problem.
1 INTRODUCTION
The twenty first century is named after Asia economy is primarily agriculturally driven. The agricultural industries like sugar industry is a major source of revenue and employment in the rural areas in the economy discussed. The asian sugar industry surveying the world sugar business year by year. Thailand become the world’s second largest exporter after Brazil, Indonesia, India and third largest importer after china and Philippines. There are a lot of examples of Asian countries being a versatile exporter since last 10 years. The sugar industry occupies an important place among organized industries in India. India has been known as the original home of sugar and sugarcane. India is at the first position in sugar consumption and second in the sugar production in whole world. India is also has been able to endure among top 10 sugar exporters in the whole world since last 5 years.
Furthermore, the sugar industry of India give rise to huge revenues; approx Rs 30 billion approx annually to the exchequer of the India and gives many social and economic benefits to the sugarcane producers. Considering such a major role of the sugar industry in the economy of India.
Apart from promoting rural development, scattered wholesalers, retailers and sugar entrepreneurs in all over India also benefit from the sugar industry operations. India has been in the fundamental figure, i.e. 5.40 millian hectares respectively. The sugar industry is battling for decades and sugarcane arrears are profoundly all sugarcane growing states; at present 32.35% of the total price payable to farmers is recorded as arrears and the gap between the total year after payments dues. An additional aspect of this startling story relates to the performance of the sugar industry of India. The 30% part of the big sugar industries net worth is visible with negative marks and retained profit turned negative for almost every factory. In addition the dept equity ration reached alarming levels. Which is raising questions on the repayment capacity of the sugar industries. Moreover, profitability indicators like net profit ratio and ROCE have been found to be as low as 1 and 10 in the last 10 years. But in the last few years, many sugar industries have filed applications for insolvency, but the Indian government is not in the favor of allowing for insolvency or liquidation instead of working on viable and viable solutions for revival. To see this dire solution of that industry, there was a discussion on identification rethinking problem areas and development system in all chain activities, the Indian sugar industry has became of prime importance.
Consistently, this research is structured as follows: at the outset, the literature is reviewed determinants suggested suggested by Centobelli, 2016,2017 to gain insight into development system of the market of world sugar and brief description of multiple stream model-a-policy making theory and the applications of it to presenting studies; quantitative and qualitative.
2. SIGNIFICANT DEVELOPMENT DETERMINANTS OF SUGAR INDUSTRY
The sugar market of the world has residual co-distorted where freely traded sugar accounts for only 30-40% of the total production of sugar. Moreover, specific protectionism imposed by the respective governments, diversified sugar production system (Sugarcane Vs sugar beet being used as raw material), standardized Vs non-standardized mills’ infrastructure unusual supplier patterns and various marketing practices are distinctive features of the world sugar. No wonder, these specified features after many possibilities for development because it also presents various challenges for the industry discussed. It is worth counting, it is here that the world sugar industry is a combination of a wide range of diverse producers and exporters but this basic literature presented below mainly focuses on examples from selected Asian sugar economies, India, China, Thailand, although brief examples Australia, Brazil, Europian Union and Africa are also cited in subsequent sections.
3. THE DEVELOPMENT AND SUPPORTING SYSTEM OF GOVERNMENT
First of all, it is most important that the role of the government can not be underestimated by looking at it. The government is considered to be the principal agent for the formation of public sector units. Particular, in the case of agriculture-food item, the government supremacy is too clear. Basically government aid a lot of protection and control over domestic production does not come alone and the international trade featured with it. Thus, this upcoming section throws light on the professional support and the government support and the opposition to conservationism referencing major sugar economies. The classical industry principles commend free trade of products aka trade openers, nevertheless, there is an increase in international trade also suggested to thrive in a relatively free environment, but some firms persists with a excess of protectionist measures due to vested political interests, the spread of aggression and industry specificities. Similarly, artlessness of the sugar economies attract demanding purchases from over the whole world and make sure the better trade expectations for both nations in the economies of aria; Thailand, china and India share the heritage of sheltered sugar and what happens in these economies? By parceling domestic value, these highly sheltered countries insincerely inflate prices and supports native producers resulting in the higher costs for customers. This type of efforts have reduced their competitiveness in the production and export of sugar. Observation from the existing literature prove that these isolationist decisions have always been driven by political agenda and supported by the nation of the sovereignty of nations but in a free trade environment, mass consumers are considered superior. Until that time, evaluate efforts are being made to avoid protectionism and regulations and there is substantial empirical evidence about the regulation being implemented. The long awaited partial decontrol was implemented in 2013 India to stabilize the sick industry in question.
4. THE MECHANISM AND DEVELOPMENT OF MARKETING
Basically, the four professionally support of the world sugar marketing; the prices, places products and promotions are brazils unique sugar and production of ethanol is majorly influenced by blending largest supplier base in the world raw Vs. refined and traditional Vs.
alternative sweeteners produced major sugar marketing promotions. Centuries ago, the production of raw sugar on large scale was exclusively charged refund scheme driven by accrued benefits that were claimable on the export of refined sugar made from imported raw sugar. In the present outline, India and Thailand are the major producers of the raw sugar.
In the case of India the marketing and promotional benefits are announced by government of India to motivate manufacturers to make raw sugar and its export. There is integration and diversification in operations these sugar economies received despite consistently law sugar prices over the last five years. Asw a result, these nations are found to be very economically viable for making refined sugar from raw sugar.
Australia, the home of large scale raw sugar production and India both continue to follow the practice of purchasing and exporting raw sugar from nations with excess inventory finished goods for the rest of the world.
Lets start with India, India’s sugar policy includes a broad range of approaches;
sales and marketing and pricing system. Currently, two types of pricing structures are
prevalent in the Indian sugar industry; a rational pricing system for state consultative prices and fair and remunerative prices based on the sugarcane revenue sharing formula.
5. MECHANISM AND DEVELOPMENT OF SUPPLIER
The relationship between producers and owners of sugar industries has always been a peculiar issue in all sugar industries. Economies and a counter-beat policy being supported by both sides at all times. The competition in the sugar market are broadly depending upon the good relationships between all stakeholders, especially according to goucher et al.
between producers and factories owners. It was also observed that the integrated supply mechanism by the stakeholders discussed has been proposed as a holistick solution for better positioning that can ensure optimum capacity utilization across factories and maintain the development. Its raw material is the sugarcane, being a controlled and commodity of very low margin in the world. Essentially, expected to be nearby the factories.
In the sugar industry, this constitutional commitment named as “Zonning System” that connects both parties with the arrangement of guarranted supply beet from producers and the requirement from the side of industry owners. Generally, this arrangement build to deal with internal and unusual issues especially in India; even the supply of rejected sugarcane varieties has been more burden on the industries. However, the farmers have to wait long for their turn to unload the lorry at the factory premises to sell its produces to the allotted factories that in turn affets the sucrose content.
6. VARIEGATION AND DEVELOPMENT OF OPERATIONS
The variegation is a viable means of increasing productivity, achieving economies of scale and dealing with financial failures resulting from a single production process. This may very related product lines, for example; the integrated sugar complex is a diverse and value added phenomenon that produces green energy- bio-ethanol, bio-power and bio-manure.
The entire sugarcane biomass (Food cum-bio-commodity) is usable which signifies that all remaining in the entire value chain can yield significant revenue. After some time it is founded that the industries with power generation plants are earning higher revenue and profits than those who have so far adopted the ISC model. On the other hand, being a sustainable source of energy and eco-friendly fuel, ethanol cane producers (in the case of excess production as optional choice to sell their produce), manufacturers of sugar (decline in the financial viability as a viable business) in view of its importance. To diversify the clause, oil marketing firms (to meet the obligation as per orders of the government) and to the government.
7. INTERNAL INFRASTRUCTURE AND DEVELOPMENT OF INDUSTRIES
The high ratio of labour cost to total cost of production in producing the sugar entails adoption of mechanization in both process as cultivating and milling.
Besides this, the choice between the production of raw sugar and the refined sugar also depends on the support of the government and the infrastructure here mainly consists of refinery setup, produce and process renovation (installation of new plants and tools in sugar industries) and mechanization in agriculture processes and some other components like TQM, ICT implementation, adhere to environment safety standards.
8. RESEARCH METHODOLOGY AND DATA:-
After studied and observed it would be say that this study is extremely oriented towards the discussion of the options of the development available in the domain of current policy dynamics.
According to information available from research agencies (Department of food and public distribution, India Sugar Mills Association, CRISIL) reports, reputed trade journals and databases such as proves, a database that chronicles the financial crisis faced by the industry is focally identified problem for the listed company by the center for monitoring Indian economy.
In addition, the sugar curbed the essential commodity situation in India and the relevant acts and laws govern and dictate its assorted dimensions; pricing, marketing, distribution and exports after the introduction of the industry protection act in 1932 and establishment of the Tariff Board.
Furthermore, the survey has also been conducted in the years 2013-15 to ascertain the viable and the viable growth determinants, keeping in view the distressing financial position of the industry discussed. As a key respondents for this study have been selected by the top and middle level executives and selected using a judgmental objective sample. The technique of sampling is basically the cognitive selection of some participants that are found to be information rich and other basis for the adoption of this sampling technique is the nature of the industry discussed and the availability of limited resources. The research approach adopted is mixed in nature, although the survey method was the predominant tool and the qualitative discussions were the result of informal reviews with survey respondents during and after filling out the questionnaire. The questionnaire was designed to address problems pre-arranged and more broadly, current policy dynamics and viable solutions executive ranks and listed sugar industries have significant experience industry of the total holding 675 industries professionals.
9. THE SUPPORTING SYSTEM OF GOVERNMENT
This segment is referred to the represent the exact reason behind involving the government in the operation of the industry and chosen on the inspection bases such as the incidence of intervention, the related benefits and the underlying nature of the government regulations and help information multivariate radar graphics approach. The maximum number of applicants are expressing the fact the government continues to obstruct with the operation of the sugar market, reflecting the perverse practices of the industry. However, some of the applicants concur with the encouraging role of the government in providing reassurance packages to continuously scale up operation of the industries. So, it is so important that the government must intercede immediately for the reassurance of the sugar industry, that is in terrible inlet.
10. THE MECHANISM OF MARKETING
The marketing structure of the sugar industry of India is a little bit complex in the term of transparency and execution in the operations. This published literature is replete with discussions aligned towards the sugar and the policy of sugarcane pricing, distribution policies of sugar, supply of sugar in domestic market.
It is confirmed that there is a need to harmonize raw material decisions such as the sugarcane price, division system and the quality of cane to be crushed as the finished sugar is under control. In addition, it is propounded that the nation that in country trade policy with respect to the price system and balancing the occurrence between the production of the sugar and the price of sugar cane the sector that require the Indian government to pay special attention to other products. In contrast, the price of sugar cane and sugar is not determined by the sugar manufacture. Additionally, the price of raw material is not based on quality standard. The sugar industry should not pay an amount less than the statutory minimum price determined by the government as per the sugarcane pricing, irrespective of its quality and the prices in excess of this statutory minimum price shall be fixed at the state level in form of SAP.
11. CONCLUSION
The industry “cyclical existence and backed with consistent the support of the government”
is adopted proverb for sugar industry of India as per the problem of sugar sector is president owing due to persistent sickness of many collaborators. Therefore the aim of this study is to substantiate the development dimensions that can enhance the over ambitiousness of the industry. Some up vote problems which are published on the source of media were impulsively spotlighted by the professional of industry with viable and trending development solutions. Between the partial denationalize measures; substantial attention was paid to the marketing mechanism of the sugar and, in particular, the removal of the levy quota and the advance release system, were distinct improvement in the annuals of reeling sugar history.
Similar is the case with FRP price system declared by the UPA government, also the expecting policy exhortation from various notable committees, by struggling with the partial implementation bar. The supremacy of the state governments; in particular the price mechanism preventing the competitiveness of the industry at the national and international
level. In addition, isolationism continues in the twelfth five year plan; consequently, this ruling industry needs a truly comprehensive solution because according to their approach and prior research, these subsidized and protectionist measures may not ensure the development of the sector in the long run. In the analysis section, as discussed the industry is largely supporting exports as a source of liquidity by linking harmonization in exports policy and financial viability; in additionally the government of India rectified the regulations for sugar industry time to time to provide the relief. After the sugar policy and marketing improvements, variegation in the process of production and adoption of technology across states to be at par with inter-competitors. This emulsion seems viable for Indian country as a term of total installed capacity, bio-mass generation and power generation capacity, India is one of the top five sugar economies.
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