For long TN Chief Ministers have not been enthusiastic about interacting with business leaders. It’s a welcome change that the TN Chief Minister met with a delegation of sugar producers and listened to their specific problems.
For years, there has been an unresolved conflict: sugar companies expressing their inability to pay the state-advised price for sugarcane fixed over and above that recommended by the Centre after a detailed study of costs and prices. This has been resulting in mounting arrears on sugarcane supplied. There are prolonged litigation and difficulties in reconciling the differences.
With national production falling steeply during the sugar season 2016-17 to 203 lakh tonnes, Tamil Nadu, already a weak producer, witnessed production dropping to around 6.5 lakh tonnes against the capacity of 25 lakh tonnes. Even as all India production in the current season estimated to bounce back to 322 lakh tonnes, the state’s production is predicted to rise to just 10 lakh tonnes.
The delegation led by Dr P G Periasamy, President, South India Sugar Mills Association, is sanguine about the meeting with the Chief Minister held after years. With the monsoon normal and the Mettur dam overflowing, there are good prospects for the industry enjoying better times during the next season as well. But over the longer term, the viability of the industry, dependant on water-guzzling sugarcane crop, appears uncertain.
With the criterion changing from production per acre to water consumption per crop, there will be increasing queries over the rationale for water-intensive crops like sugarcane and rice raised in water-stressed states like Tamil Nadu.
