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By Shambhu Kumar, J P University, Chapra, Bihar and Kumar Gautam, Centre for Trade and Development (Centad), New Delhi
India is the second biggest producer of sugarcane and the largest consumer of sugar in the world. Some 50 million people, or 7.5% of the rural population, depend on the sugar industry for a livelihood in some way or another. The industry thus has the potential to lift millions of people out of poverty.
International and national trade policies however have not allowed the industry to reach its potential. This publication, brought out by Oxfam's Make Trade Fair global campaign, analyses international and domestic trade policies that impact the sugar cane industry in India and particularly in Bihar, where sugarcane is an important commercial crop and five lakh farmers depend on it for a livelihood. Huge trade distorting subsidies paid by the European Union (EU) to its sugar beet farmers resulted in five million tones of surplus sugar being dumped in developing countries every year, eroding their competitive edge. In September 2004, a WTO ruling forced the EU to cut its subsidies by 36% over four years. This publication suggests other measures the EU can take to make its sugar trade more fair.
The paper suggests that domestic policies and practices must gear up to take advantage of the improvement likely in the international scene as a result of the WTO ruling.
On the domestic front, the industry suffers from structural problems, uneven productivity, and uncertain pricing structure. In Bihar, once a major sugar producing state, efforts are on to increase the acreage under sugar cane and revive mills that had shut down. In a case study of one mill, the paper shows how lack of cane management and development strategies caused losses.
Timely and remunerative payment to farmers and labourers, better irrigation facilities and credit facilities, co-operation between farmers and mill owners will encourage more cultivators to take to sugar cane cultivation, says the paper. Tables giving world and national statistics on production, exports, imports, taxes and other details are appended.
Click here to read the full paper in PDF format.
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