Surplus Sugar Production In India

• In 2021-2022, India surpassed Brazil to become the largest sugar producer in the world, producing 359 lakh tonnes – an all-time high.

• However, the extensive use of resources in sugar production is depleting rapidly, leading to a potential crisis in the future.

• For farmers across most of India, sugarcane is one of the most profitable cash crops. This has led to chronic over-cultivation of sugarcane, reflected in the country’s sugar surplus and high sugar exports.

• The impact of this on the country’s groundwater is, disastrous – and it has also been overlooked. Reasons for Excess Sugar Production

• India is the world’s largest consumer of sugar, and thus has to produce enough to meet its huge domestic demand. But the excess production comes from policies and measures that make farmers favour sugarcane cultivation.

• The Central government offers a fair and remunerative price (FRP) scheme, which mandates a minimum price that sugar mills have to pay to sugarcane farmers, ensuring that farmers always get fair profits for their crop.

• State governments also offer heavy subsidies to incentivise sugarcane cultivation. The resulting sugar surplus has led to higher exports, with a record 110 lakh tonnes exported in 2021-2022.

• In fact, Brazil, Australia, and Guatemala filed a complaint with the World Trade Organisation against India for violating international trade rules.

• They had complained that India offers excessive export subsidies and domestic support to farmers to outcompete other countries in the global sugar market. The Organisation ruled against India and India also lost its appeal.