“AN ECONOMIC EFFICIENCY OF SUGAR CO -OPERATIVES
IN SOUTH GUJARAT REGION OF GUJARAT”
A
THESIS
SUBMITTED TO THE
NAVSARI AGRICULTURAL UNIVERSITY
NAVSARI
IN PARTIAL FULFILMENT OF THE REQUIREMENTS
FOR
THE AWARD OF THE DEGREE
OF
PHILOSOPHY OF DOCTRORATE
IN
AGRICULTURAL ECONOMICS
BY
P ARM AR VI R AL SINH NAT VAR SI NH
M.Sc. (AGRI.)
DEP ARTMENT OF AGRICULTURAL ECONOMICS
N. M. COLLEGE OF AGRICULTURE,
NAVSARI AGRICULTURAL UNIVERSITY,
NAVSARI – 396 450
GUJARAT
Feb. – 2015
Registration No. 04-0825-2010
The journey of the study is not
finished without….
DEDICATED
To
MY BELOVED
FAMILY AND MY GURU
ABSTRACT
“AN ECONOMIC EFFICIENCY OF SUGAR CO -OPERATIVES
IN SOUTH GUJARAT REGION OF GUJARAT "
Name o f St udent
Major Advisor
Parmar Vi ralsinh N.
N
Dr. K. S. Patel
DEPARTMENT OF AGRICULTURAL ECONOMICS
N. M. COLLEGE OF AGRICULTURE
NAVSARI AGRICULTURAL UNIVERSITY
NAVSARI - 396 450
ABSTRACT
An atte mpt has been made in this study to analyze
the various para meters of growth and performance of the selected
co-operative sugar factories of South Gujarat region so as to
identify the cause of their success or failure for suggesting
appropriate measures of improve ment.
The five co-operative sugar factories registered as,
(1) Shree Khedut Sahakari Khand Udyog Mandali Ltd; Bardoli, (2)
Shree Madhi Vibhag Khand Udyog Sahakari Mandali Ltd; Madhi
(3)
Sahakari Khand Udyog Mandal Ltd; Gandevi (4) Shree
Mahuva Pradesh Sahakari Khand Udyog Mandali Ltd; Mahuva and
(5) Shri Maroli Vibhag Khand Udyog Sahakari Mandali Ltd., at
Kalasana (Kalyannagar) were selected for study.
The study was based on secondary as well as
primary data. The secondary data was available fro m the annua l
reports and official records of the respective sugar factories and
other relevant aspects were obtained fro m various magazine and
publications etc. The primary data for the calculating the cost o f
production of sugarcane, a cluster of four villages having major
area under sugarcane was selected from the jurisdiction of th e
selected sugar factory. To fulfill the objectives of the study four
villages were selected at rando mly from the respected co -operative
sugar factory jurisdiction. Thus, twenty villages were selected, and
12 farmers from each village were selected. Thus, total 240
farmers were selected.
Both, linear and co mpound growth rates in respect
to total cane crushed, total sugar produced and sugarcane available
for crushing were used to exa mine the growth of the selected co operative sugar factories.
The performance of the factories were studied
over a long-run (whole period) for 12 years and short -run (recent
period) for 5 years. An in depth analysis of the performance of the
factories over the short-run was carried out in respect of capacit y
utilization, sugar recovery, cost of production of sugar and cane
price paid to farmers. The study revealed that the capacity
utilization and sugar recovery of the Gandevi co -operative sugar
factory was higher than the other selected co -operative sugar
factories due to sufficient availability of good quality sugarcane
and better manage ment of the Gandevi sugar factory.
The per quintal cost of production of sugar was
lower in case of the Gandevi co -operative sugar factory. It was
more in the Maroli co -operative sugar factory due to more
expenditure incurred for manufacturing (Salaries and wages as
well as machinery repairs and maintenance and che mical cost etc.)
and managerial and administrative expenditure.
As a result of better manufacturing and excellent
production performance, the cane price paid by the Gandevi co operative sugar factory was higher than the other selected co operative sugar factories. Bardoli co -operative sugar factory also
paid good cane price next to Gandevi co-operative sugar factory.
The
study
suggests
that
capacity
utilization
performance, machinery maintenance and financial manage ment
needs to improve incase of the Maroli co -operative sugar factory.
Harvesting and transport operati on and sugar recovery percentage
need to be enhanced especially incase of the Maroli co -operative
sugar factory. All the factories need to take special efforts for
increasing hectarage yield of cane and production of adequate
quantity and to supply good qu ality sugarcane cultivar in the
operational area of the factory.
Results of the study indicated that sugarcane was
highly capital intensive crop and incurred total cost of cultivatio n
of ` 181986.10 (Cost C 2 ) per hectare. It was the hi ghest on large
farms (` 187214.98) and lowest on small farms (` 179486.99). O n
an average cost-A (paid out cost) formed 72.49 per cent of tota l
cost, while cost - B accounted for 93.71 per cent of total cost. The
average yield per hectare was 84.91 tonnes on sample farms. The
average per hectare farm business inco me and fa mily labour
inco me were ` 140068.59 and ` 100833.20, respectively on the
sample farms. The results also indicated that sugarcane cultivatio n
was highly profitable crop and as a result the average net profit per
hectare over Cost - C 2 was ` 89400.69.
It is noted fro m the study of the resource use on
all the farms of sugarcane growers under study, the regressio n
coefficient for human labour, t ractor hours, and manures were
significant at 1 per cent level of significance, respectively. Whic h
means that one unit increase in that factors of production will
increase the yield by 0.832, 0.400 and 0.210 per cent, respectively.
In case of irrigation, the regression coefficient was significant at 5
per cent level which increased the production at 0.830 per cent.
The use of nitrogen was negative and significant at 5 per cent leve l
of significance which indicates the use of one more unit of
nitrogen fertilizer will reduce the yield by 0.310 per cent. The
result indicated that good land preparation, proper planting,
weeding,
adequate
irrigation
and
reco mmended
dose
of
nitrogenous fertilizer will increase the sugarcane production.
Majority of farmers marketed their sugarcane to
the co-operative sugar factories. Per rupee return from cultivatio n
of sugarcane crop was highest on large sized farms ( ` 1.54) and
lowest on s mall sized farms (` 1.46) with an average of ` 1.49. No
great difference was observed because there was a less difference
in the cost and production of sugarcane crop in the study area.
Therefore, it can be concluded that the sugarcane cultivation was
quite re munerative, but if the price of cane dropped by co operative sugar factories than it is difficult to re munerative
cultivation, because there is no other marketing option for
sugarcane in South Gujarat.
Dr. K. S. PATEL
Professor and Head,
Department of Agril. Economics,
N. M. College of Agriculture,
Navsari Agricult ural University,
Navsari -396 450
CERTIFICATE
This is to certify that the thesis entitled “An Economic
Efficiency of Sugar Co-operatives in South Gujarat Region of
Gujarat”
submitted
by
Mr.
VIRALSINH
NATVARSINH
PARMAR in partial fulfillment of the requirements for the award
of
the
degree
of
PHILOSOPHY
OF
DOCTRORATE
(AGRICULTURE) in AGRICULTURAL ECONOMICS of the
NAVSARI AGRICULTURAL UNIVERSITY
is a record o f
bonafied research work carried out by him under my guidance an d
the thesis has not previously formed the basis for the award of any
degree, diploma or other similar title.
Place: Navsari
Date:
/02/2015
(K. S. Patel)
Major Advisor
DECLARATION
This is to declare that the whole of the research work
reported in this thesis in partial fulfillment of the require ments for
the
degree
of
PHILOSOPHY
OF
DOCTRORATE
(AGRICULTURE) in AGRICULTURAL ECONOMICS by the
undersigned is the result of investigation c arried out by me under
direct guidance and supervision of Dr. K. S. Patel, Professor and
head,
Department
of
Agril.
Economics,
N.
M.
College
of
Agriculture, Navsari Agricultural University, Navsari and no part
of the work has been sub mitted for any other d egree so far.
Place: Navsari
Date:
(Parmar Viralsinh N.)
/02/2015
Countersigned by,
(K. S. Patel)
Professor and Head,
Department of Agril. Economics,
N. M. College of Agriculture,
Navsari Agricultural University,
Navsari-396 450
A C K N O W L E D G E M E N T
No words can express my hearti est respect and emotions
towards my mother Smt. Madhuben N. Parmar and my f ather Shri
Natvarsinh A. Parmar f or their sacrif ices, trust, love, care and
encouragement throughout my journey. I f eel very glad to express my deep
sense of gratitude and humblest salutation at their f eet.
I f eel immense pl easure in expressing my deep sense of respect
and gratitude t o my major advi sor Dr. K. S. Patel, Prof essor and head Dept.
of Agril Economics, N. M Col lege of Agriculture, Navsari Agricultural
Universi ty, Navsari, f or his keen interest, scientif ic guidance, and constant
encouragement throughout the course of investi gation and preparation of
this thesi s. I had the privil ege to have a great teacher, mentor and guide
like him who have brought me closer to the realit y.
I would like to thank the members of my advisory committee Dr.
R. K. Pari kh Associate Prof essor, Dept. of Agril. Statistics, N. M College of
Agriculture, Navsari Agri cultural Uni versity, Navsari Dr. Narendra Singh,
Associate Prof essor Dept. of Agril Economics, ASPEE College of
Horti culture & f orestry, Navsari Dr. A. K. Leua, Associate Prof essor Dept.
of Agril Economics, AIABM Navsari and Dr. J. J. Makadia, Associat e
Prof essor, Dept. of Agril Economics, N. M College of Agriculture, Navsari
Agricultural University, Navsari,
f or thei r admirable guidance,
encouragement and insightf ul comments, during the period of this research
work and course of study.
My sincere thanks goes to Mistri Sir, Ahir Sir, Anju ben,
vikrambhai, Sangitaben, Abdulbhai and Sanjaybhai . Also I am very thankf ul
to the staf f at Dept. of Agril Economi cs , NMCA, NAU, Navsari, whose
f riendship and support have made it more than a temporary place to carry
out my research work.
I am gratef ul to Principal, N. M College of Agriculture,
Navsari Agri cultural Universi ty, Navsari , Director of Research and Vice Chancellor Navsari Agri cultural Uni versity, Navsari, f or providing
academic and technical support duri ng the course of study and research
work.
I treat it to be the great privil ege to record my heartiest thanks
to the Managing Director of the all the select ed co -operative sugar
f actories f or ext ending f ull co -operation to compete the research project. I
take thi s opportunit y to express my sincere thanks to the chi ef agriculture
off icer (Estate Manager), Chief Chemi st and ADM off icer of the f actories.
In my daily work I have been blessed with a f riendly and
cheerf ul group of my f riends Pravin M odi, Tandelbhai , Dr. Ajay Patel,
Dr.Vipul Patel, Dr. J. M. Patel, Dr. Sachin Chavan, Dr. J. K. Raval, Dr.
Shivam Bhatt, Dr. Gajre, Dr. Prakash, Tushar, Prashant, Nitesh, Mayur,
Ramesh, Satish, Sami r, Satyakant, Vipul, Brijesh, Ripal, Jignesh , Matieda,
Rasik, Pinakin, Manish, Sunil, Irf an, Rakesh very gratef ul to all of them f or
their support and care.
My special thanks to Ni sheeta Pat el, More si r and Surendra
Kuthe f or their admi rabl e help and great contribut ion f or preparation of
dissert ation.
Words are not enough to express my hearti est gratitude and
love f or my beloved mother, mother in law, brother, brother in law, my
loving si ster Neha and si ster in laws who have been the constant source of
inspi ration, encouragement and thei r mora l support to buil d up my
educational carrier moulding my lif e because of whi ch I could reach the
present status of education.
It is my sincere duty to acknowl edge my wif e Meghavi who
shouldered all my f amily and social responsibilities, constant
encourage ment of every stage of my study and also took great care of the
education of our chil dren during the period of my study. Son, Roodra and
Daughter Roodraxi and sister -in-law Dr. Sonal who sustained a lot to me
being comparativel y unattentive to them during the entire peri od of study
My words are not enough to express my f eelings. Let it be a warm littl e
word, a big thank you.
Nothing can move without the will of that almighty. I am lucky
and f ortunate enough to have grace and blessings of that almighty t o
complet e the task of writing thi s thesis.
Lastly, I off er my regards and blessings to all who support ed
me di rectl y or indi rectl y in any respect duri ng the compl etion of this
research work.
Place : Navsari
Date :
/02/2015
(Viralsinh N. Parm ar)
CONTENTS
PAGE
CHAPTERNO.
PARTICULARS
NO.
I
INTRODUCTION
1-12
II
REVIEW OF LITERATURE
13-37
III
METHODOLOGY
38-53
IV
RESULTS AND DISCUSSION
54-116
V
SUMMARY AND CONCLUSIONS
117-135
REFERENCES
APPENDIX
I-VI
VII-XXII
LIST OF TABLES
TABLE
PAGE
TITLE
NO.
1.1
3.1
3.2
NO.
Progress of Sugar factories in India
5
Name of selected villages with respected co operative sugar factories jurisdiction
General information about selected co -operative
sugar factories
43
53
4.1
General characteristics of sample farmers
56
4.2
Cropping pattern of South Gujarat region
58
4.3
Production patter of South Gujarat region
59
Compound growth rates of area, production and
4.4
productivity
of
sugarcane
crop
in
selected
61
districts of Gujarat during 1988 -89 to 2011-12
4.5
Simple linear and compound growth rates of the
selected factories during 2001 -02 to 2012-13
64-65
Average capacity utilization of selected co 4.6 (A)
operative sugar factories during recent period
71
(2008-09 to 2012-13)
4.6 (B)
Co-efficient of variation capacity utilization
percentage (2008-09 to 2012-13)
73
TABLE
PAGE
TITLE
NO.
4.7 (A)
4.7 (B)
4.8 (A)
4.8 (B)
4.9 (A)
4.9 (B)
4.10 (A)
4.10 (B)
4.11 (A)
4.11 (B)
NO.
Average capacity utilization percentage during
whole period (2001-02 to 2012-13)
Co-efficient of variation capacity utilization
(2001-02 to 2012-13)
Average sugar recovery during recent period
(2008-09 to 2012-13)
Co-efficient of variation in sugar recovery
percentage (2008-09 to 2012-13)
Average
sugar
recovery
percentage
during
whole period (2001-02 to 2012-13)
Co-efficient of variation in sugar recovery
percentage (2001-02 to 2012-13)
Average per quintal cost of production of sugar
during recent period (2008-09 to 2012-13)
Co-efficient of variation in per quintal cost o f
production of sugar (2008-09 to 2012-13)
Average cost per quintal of production of sugar
during whole period (2001-02 to 2012-13)
Co-efficient of variation in per quintal cost o f
production of sugar (2001-02 to 2012-13)
74
75
77
78
79
80
82
83
84
85
TABLE
PAGE
TITLE
NO.
NO.
Average cane price paid to farmers for tones o f
4.12 (A) sugarcane during recent period (2008 -09 to
87
2012-13)
4.12 (B)
Co-efficient of variation in cane price paid to
farmers (2008-09 to 2012-13)
88
Average cane price paid to farmers for tones o f
4.13 (A) sugarcane during whole period (2001 -02 to
89
2012-13)
4.13 (B)
Co-efficient of variation in cane price paid to
farmers (2001-02 to 2012-13)
90
Sugarcane availability and percentage capacity
4.14
utilization – I during recent period (2008-09 to
93
2012-13)
Factors
4.15
influencing
the
average
percentage
capacity utilization – II during 2008-09 to 2012-
95
13
4.16
4.17
4.18
Factors
influencing
the
average
percentage
sugar recovery during 2008 -09 to 2012-13
Average per quintal cost of production of sugar
during 2008-09 to 2012-13
Pattern of input use in cultivation of sugarcane
crop
98
100
105
TABLE
PAGE
TITLE
NO.
4.19
4.20
4.21
4.22
4.23
4.24
4.25
NO.
Estimation of different cost
Yield level, farm harvest price and gross inco me
per hectare
Net gains over different cost per hectare
Farm business income, family labour inco me
and net profit
Input-Output ratio
Cost of production of sugarcane per tones on the
basis of different cost concepts
Estimation of regression analysis of resources
use in sugarcane crop on sa mple farms
106
108
109
110
111
112
114
LIST OF FIGURES
FIGURE
TITLE
NO.
1
2
Various Products fro m sugarcane by
sugar factories
Location of selected co -operative
sugar factories
AFTER
PAGE NO.
53
53
3
Capacity Utilization - I
75
4
Capacity Utilization – II
75
5
6
7
8
9
10
Average sugar recovery of selected
sugar factories
Average per quintal cost of production
of sugar including cost of cane
Average per quintal cost of production
of sugar Excluding cost of cane
Average cane price paid to farmers by
selected sugar factories (per tonnes)
Average Sugarcane availability during
2008-09 to 2012-13
Total Crushing Time and Total Time
Losses of selected factories (hrs.)
79
85
85
89
92
95
INTRODUCTION
I. INTRODUCTION
“Honey produced without bees” means producing sugar
by evaporating of cane juice. Sugarcane occupies very prominent
position on the agricultural map of India. Historically origin o f
sugarcane
spp.
Saccharum
barberi
is
India
and
Saccharum
officinarum is New Guinea. Sugarcane is known t o be thriving well
in Brazil, India, Australia, Cuba, USA, Philippines, USSR and
Indonesia. 115 countries of the world cultivate sugarcane and
produce about 133 million tonnes of sugar, which is three fourth o f
total sugar production (169 million tonnes) o f world. Remaining
sugar co mes fro m sugar beet.
The sugar industry has great significance which can not
be devalued in its relation to agricultural and industrial economy
of the rural region of India.
Sugarcane industry is one of those industries which
affects agriculture funda mentally. Therefore, the expansion o f
sugar industry in India is an indispensible factor for the uplift o f
socio-economic life of India. Sugar industry is an agro based
industry and located in rural areas. Sugar industry has provid ed the
most effective instrument for carrying progressive trends in to the
country side.
Sugarcane is the sole raw material for the largest agro processing industry in the rural sector, providing e mployment to
millions of the people in rural sector. The varieties of agro-based
industries in India are sugar industry, textile industry, jute
1
industry, silk industry, marine and fisheries industry, etc. Among
these the sugar industry is the predominantly agro -based industry.
Agriculturally
do minant
country
like
ours,
sugar
industry plays a major role in setting in motion a process for
regeneration of the rural economy. It exerts a visible influence o n
the
agro-technological,
aspects
of the
rura l
socio -economical
masses.
and
socio -politica l
Develop ment of this
industry
especially in the co-operative sector has made it possible to
achieve
social-reformation,
educational
awakening,
rural
industrialization and employment for intellectuals, technocrates,
million of skilled and unskilled labours.
1.1
Importance of sugar industry in India
India is known as the original home of sugar and
sugarcane. In the global sugar economy, Indian sugar industry has
achieved a number of milestones. India is the second largest
producer of sugar in the wo rld after Brazil.
Sugar industry processing local agricultural produce
and located in the rural area in Gujarat state has massive and eye
catching development impact on the rural community. It has
become a powerful instrument in the development and mobil ization
of natural, human and financial resource of the state.
The sugar industry is the second largest agro industry in
the country next to textiles. It occupies an important place in the
rural econo my of the country. This industry plays a dominant role
in both agricultural as well as industrial development. They have
2
symbiotic relationship with the rural masses and serve as catalytic
agent for rural development.
A large do mestic market and a high potential for export
trade are available for the s ugar industry in India. It is one of the
biggest industries earning a good deal of foreign exchange.
About
45
million
farming
community
constituting
nearly 7.5 per cent of rural population are involved in the
cultivation of sugarcane. This industry provid es employment to
more than 5 lakh skilled and unskilled workers. The annual wages
bill of the industry is more than ` 1000 crores. The contribution o f
sugar industry to the central treasury by the way of central Exise
duty is over ` 1000 crores annually. In addition to these, the state
government collects over ` 600 crores per annum as purchase ta x
and cess on sugarcane (Sono mon et al., 2000).
This industry has helped to commercialize agriculture to
a greater extent. In the co -operative sector, the cultivator is the
producer of raw material, processor of the raw material and also
the owner of the factory. The prospects of this industry seems to
be bright because of its potential for manufacturing multifarious
by-products
like
a lcohol,
paper
and
pulp,
cattle
feed,
confectioneries and allied chemicals. Sugar and its by -products
play a pivotal role in the agro -industrial econo my and share nearly
2 per cent of GDP. The industry not only generate the power for its
own requirement but surplus power for export to the grid based on
byproduct-bagasse. It also produce ethyl alcohol, which has
3
industrial and potable uses, and ethanol is eco -friendly and
renewable fuel for blending with petrol(Anon.2009).
1.2
Progress of sugar industry in India
The real and effective starting point for the sugar
industry in co -operative sector was provided by the establishment
of co-operative sugar factory at Pravara Nagar in Ahmednagar
district of Maharashtra in 1950 -51.
Dr. Gadgil, an eminent co-operator and economist
observed that the farmers suffered from violent fluctuation in Gur
prices. It was also noticed that the factory owners had made
enormous profits by securing land at very low lease rates and by
buying the sugarcane fro m sugarcane growers at very low prices.
The farmers were often exploited by the middle men, traders and
manufacturers. Besides in overcoming the exploitation by the
private sugar factories with an objective of the reveling the
farmers from such exploitation and ameliorating t heir economic
conditions, Dr. Gadgil put his idea in to practice by establishin g
the first successfully managed sugar factory on co -operative basis
with help of local peasant leader Pad mashri B. Vikhe Patil at
pravarnagar.
The growth of the vacuum pan sugar industry in India
can be traced back to the early part of this country. In 1930 -31,
there were 29 sugar factories producing 0.120 million tonnes of
sugar. This was however, not adequate to meet the interna l
require ments and about 0.8 million tonnes of sugar was imported
in that year.
4
As a result, in the year 1936 -37 number of sugar
factories increased to 137 with 1.13 million tonnes of sugar
production. Again during the year 1950 -51, the number of suga r
factories increased upto 138 (Indian sugar, July, 2003) The
progress of the sugar industry during the post independence period
has been the result of wide spread expansion in the number of
factories, area under sugarcane and production of sugar. The
development of this industry after post independence in private
and co-operative sector is sown Table 1.1.
Table 1.1
Progress of Sugar factories in India
Sugar production in Percentage
No. of
lakh tones
of cocooperative
Cooperative
Total
sugar
operative
sugar
sugar
factories
sugar
factories factories
to total
factories
Year
Total
sugar
factories
1960-61
173
30
30.21
4.50
14.90
1965-66
200
53
35.41
9.41
26.60
1970-71
215
73
37.40
12.62
33.70
1975-76
252
103
42.62
20.33
47.70
1980-81
315
149
51.48
29.03
56.40
1985-86
342
186
70.14
41.13
58.00
1990-91
385
220
120.47
72.74
60.40
1995-96
410
232
164.53
96.42
58.60
2000-01
436
259
185.10
104.94
56.70
2005-06
453
263
192.67
108.95
56.57
2010-11
671
297
243.94
139.58
57.22
Source : Sugar India, 2012.
5
Presently the number of installed sugar factories has
gone up to 671 (Sugar India, year book 2012). The fast expansion
of industry has observed in western and southern India. The large
increase in the number of jaggery and khandsari was also observed
and simultaneous the tremendous increase in crushing capacity of
the running factory was also predominant. Most of the factories in
the year 1930 had the plants of 300 -600 TCD, has increased in the
year 1952 as 1000 -1250 TCD and up to 10,000 TCD in late 1980.
At present, there are about 40 sugar factories in capacity range of
5000-10,000 TCD (Sugar India yearbook - 2000). So this industry
occupies an important place a mong the organized industries in
India.
In
the
year
1950 -51,
the
area,
production
and
productivity of sugarcane was 1.7 million hectares, 69.22 million
tonnes and 40.5 tonnes per hectare, respectively. These has
increased to 5.1 million hectares, 342.2 million tonnes and 68.1
tonnes per hectare, respectively in the year 2011 -12.
In the year 2010-11, the total number of sugar factories
were 671, which have crushed 239.81 million tonnes of sugarcane
to produce 24.39 million tonnes of sugar. The recovery percentage
was 10.17 in the same year.
1.3
Performance of sugar industry in Gujarat
Gujarat ranked sixth in sugar production in India.
During the crushing season of 2011 -12, Gujarat produced 11.89
lakh tones of sugar, which contributed about 3.86 per cent of total
sugar production in India.
6
Gujarat is considered to be one of the leadi ng states in
India in the co -operative sugar factories and South Gujarat is
recognized as the most important centre of successful sugar co operatives. Agroclimatic condition of Gujarat especially in south
Gujarat is more suited for the cultivation of sugar cane. In the
state, there were only 2 sugar factories in the year 1960 -61. Now,
it has gone upto 21 and all are co -operative sugar factories. These
sugarcane co-operative
factories have got different crushing
capacities ranging fro m 1250 to 10,000 tonnes o f sugarcane per
day. This variation in the crushing capacity has a significant
econo mic impact. The area under sugarcane in the Gujarat State
was 0.26 lakh hectares in the year 1960 -61, while the productio n
of sugarcane during the same period was 13.30 lak h tonnes(Indian
Sugar, May, 1983). In the year 2001 -02 the total cultivated area
under sugarcane was 1.76 lakh hectares and the cane production
was 124.65 lakh tonnes and 10.56 lakh tonnes sugar with 10.47 per
cent sugar recovery (Indian Sugar, July, 2003) .
The continuously increasing trend has been observed in
area and production of sugarcane in Gujarat. In 1987 -88, the
sugarcane was cultivated only in 0.82 lakh hectares. It has now
increased to 1.76 lakh hectares in 2001 -02 alongwith production
from 60.78 lakh tonnes to 124.65 lakh tonnes (Indian Sugar, July,
2003). In the year 2010 -11 the area increased to 1.90 lakh hectares
and the production of sugarcane was 137.60 lakh tonnes with the
productivity of 72.04 tonnes per hectares (sugar India, year book,
2012).
7
The South Gujarat is pre -dominant sugar producing
region in the state, having remarkable growth and performance of
sugar industry in the state. It has dominant role in bringing about
major structural changes in the Indian sugar industry. T he area
under sugarcane in South Gujarat was 37 hundred hectares in the
year 1960-61, while the production was 225 hundred tonnes. The
area under sugarcane in South Gujarat was 1.68 lakh hectares and
the production of sugarcane was 118.35 lakh tonnes in th e year
2001-02. The area, production and productivity of sugarcane in
South Gujarat was increased to 1.73 lakh hectares, 125.22 lakh
tonnes and 69.65 tonnes per hectare.
South Gujarat has always been producing a major
portion of sugarcane and sugar in the state. The state contributes
21 sugar factories among the m 15 co -operative sugar factories are
in south Gujarat region. At present, there are 13 working sugar
factories. Out of these, 7 are in Surat, 2 each in Navsari and
Bharuch, 1 each in Valsad and Na rmada districts. In 2001 -02, the
highest sugar recovery percentage was observed in Gandevi sugar
factory of Valsad district while lowest sugar recovery percentage
was observed in Maroli sugar factory of Navsari district. Sugar
factories in South Gujarat produced 10.55 lakh tonnes of sugar
which was 100 per cent of the total sugar produced in the state
(Co-operative sugar, June, 2003).
1.4
Role of co-operative sugar factories
A continuous
progress
has
been observed
in co -
operative sugar factories in Gujarat. The number of co -operative
sugar factories in operation in Gujarat increased from 1 to 21
8
during the period from 1955 -56 to 2001-02. So, the co -operative
sugar factories ha ve enabled the country in beco ming not only self
sufficient in sugar require ment but also contribute to world
market.
These co-operative factories are known to provide the
best extension services both with regard to disse mination of
information and knowle dge about new agricultural technology as
well as in making available the necessary inputs and services such
as provision of irrigation facilities, supply of fertilizers and
pesticides,
new
varieties
of
sugarcane
harvesting
and
transportation of sugarcane e tc.
As a result the sugarcane growers are able to get
remunerative returns for their efforts and investments. Besides,
most of the co-operative sugar factories have provided socia l
amenities to the farmers in the producing area. There are normally
beyond the means of common farmers. These include education,
health,
banking services
and better
roads.
They have
also
generated employment opportunities in the rural areas.
1.5
The problem
The co-operative sugar industry has made a rapid
progress and contributed much in the econo my of the state. In spite
of this, the industry has certain limitations and some different
types
of
problems
have
arised
which
are
having
serious
consequences.
The production performance of the co -operative sugar
factories shows some geographical differences in production. The
9
sugarcane production has experienced wide fluctuations and in turn
have affected the production of sugar. There are some factories,
which are considered as sick units. The econo mics of the sugar
factories, besides being largely depends upon the sugar recovery,
working days during season, crushing capacity utilization and cane
supply, break -even point, government price policy, age of the
factory, capital investment etc. As per the current policy 5 per cent
of
the
production
fro m
sugar
factories
is
procurred
at
administrated price by the central government as a levy for public
distribution. The sugar factories having lower average sugar
recovery and working days during season, cane supply have to face
a serious concern. Their condition further deteriorates because of
the restrict as on the zonal move ment of sugarcane.
Analysis of performance of the sugar factories beco mes
necessary to find out the reasons behind their successful or
unsuccessful
suggesting
performance .
re medial
Such
measures
analysis
for
will
helpful
improvement
in
for
their
performance. It was therefore, felt necessary to make the present
study entitled “An Econo mic Efficiency of Sugar Co -operative in
South Gujarat region of Gujarat”.
1.6
The objectives
The specific objectives of the study were as under
1. To study the change in area, production and productivity o f
sugarcane in South Gujarat region.
2. To evaluate the performance of selected co -operative sugar
factories in South Gujarat.
10
3. To find out the reasons for sickness of co -operative sugar
factories in South Gujarat.
4. To suggest the measures to improve the economic efficiency o f
the co-operative sugar factories.
5. To exa mine the resource productivity of various factors o f
production on cultivators field.
1.7
The scope and the utility of the study
The
study
is
restricted
to
the
above
mentioned
objectives only. Previously, no study regarding performance of co operative sugar factories have been carriedout in this region. The
present study covers several aspects of the performance of the
factories and their impact on each other. This co mprehensive
approach towards the proble m and the reco mmendations made by
the researcher at the end of the study may prove to be useful to
new and running co-operative sugar factories in the region.
Moreover, the sample study consists of five co -operative sugar
factories. However, the results of the study will be generally
applicable to all types of sugar factories in the region.
1.8
Limitations of the study
Taking into consideration, the limitations and resource
contraints faced by an individual researcher, performance of only
five co-operative sugar factories in the region has been studied.
This study therefore, does not claim to have fo rmulated any
general model. The study is based on secondary data viz., annual
reports of the sugar factories and official records of these
factories. Primary data was based on the me mory recall and the
11
some written notes of the farmers of the region. Valid ity of the
results of the study is therefore based on the degree of reliabilit y
of these data.
A co mplete analysis of the performance of co -operative
sugar factories would necessitate adoption of the multidisciplinary
approach. However, keeping in view the limited but specific
demand of an acade mic research in the discipline of agricultura l
econo mics at the post graduate level, only an economic analysis
has been atte mpted during the course of this investigation.
12
REVIEW
OF
LITERATURE
II. REVIEW OF LITERATURE
A comprehensive review of literature is an essential part
of any scientific investigation. The review of literature leads to the
researcher to conclude his findings with reference to past studies.
Previous studies might been carried out in different region s and
under different set of conditions. Nevertheless, they provide the
researcher an insight into the field of research work and clarify
various dimensions of the research under study. It is also necessary
in developing conceptual fra mework and selection of appropriate
design for the study. As the literature having direct bearing on
different aspects of the present study is limited hence, the
references having little or indirect bearings are also reviewed.
An objective specific review of relevant literatu re also
assist to a researcher in designing the proble m and determining the
methodology to be adopted during the course of research work.
This chapter briefly explains the review of relevant literature and
some similar studies made by the researcher.
The review have been presented under following broad heads.
i.
Change in area, production and productivity of sugarcane crop
ii.
Performance of sugar industry
iii. The reasons of sickness of sugar factories
iv. The measures to improve the economic efficiency of sugar in
industry
v.
The resource productivity of sugarcane crop.
13
9.1 The change in area, production and productivity
Chougule (1986) made an analysis of performance o f
the 32 sugar factories in Andhra Pradesh in the year 1983 -84.
According to him, fall in yield and area under sugarcane as a result
of unfavorable climatic conditions and large -scale diversion o f
sugarcane to the jaggery manufacturing units resulted into poor
performance of the factories during the year under study. Better
recovery was observed during the season as the crushing seaso n
was short and all the available cane was crushed during the peak
recovery period.
Patel and Ashturkar (1992) reported through a paper o n
„scope and pe rformance of sugarcane in Marathwada region‟ that
the
area,
production
and
productivity
of
sugarcane
was
significantly increased during 1960 -61 to 1985-86 in the region.
The
productivity
of
sugarcane
of
Marathwada
region
was
comparatively low as compared t o the state. Among the districts,
Beed showed the highest growth rate in area (7.55 per cent) and
production (8.61 per cent) while Aurangabad showed the highest
growth rate of productivity (4.72 per cent). They also reported that
during the study period, t he gross cropped area of the region was
increased three times while the sugarcane area was increased only
two times. This was due to low productivity of sugarcane observed
in the region.
Kalola, et al.(2009) estimated the growth and level o f
instability in area, production and yield of sugarcane crop o f
different region of Gujarat. The District wise time series data o n
area, production and yield of sugarcane of the state were collected
14
from the Directorate of Agriculture, Gujarat State, Gandhinagar for
the period from 1960-61 to 2006-07. Analysis was done period
wise (1961 to 70, 71 to 80, 81 to 90, 91 to 2000, 2001 to 2007 nd
1961
to
2007)
for
five
different
regions
of Gujarat
state
(Saurashtra, North Gujarat, Middle Gujarat, South Gujarat and
Kutchh) and Gujarat as a whole. The results for growth rate of
area, production any yield of sugarcane was found positive and
significant in the period 1961 to 1970 for the Saurashtra regio n
and 1961 to 2007 for t he Middle Gujarat region. The growth rate
of yield was found positive and significant in the period 1981 to
1990 for North Gujarat. The result of growth rate for area and
production was noticed positive and significant in all periods
except 2001 to 2007 for the South Gujarat region. In the Kutchh
region, the growth of yield was found positive and significant in
the period of 1981 to 1990 and 1961 to 2007. The results for
Gujarat state indicated that positive and significant growth rate o f
area, production a nd yield of sugarcane was noticed in almost all
the periods except 1981 to 1990 for area and 1991 to 2000 for
yield. The results for the instability index for area was found
lowest (4.82) in the period 1991 to 2000 for the Gujarat state and
the highest (105.05) in period 2001 to 2007 for Kutchh region. For
production, it was found lowest (3.73) in period 1991 to 2000 for
North Gujarat region and the highest (104.82) in case of 2001 to
2007 for Kutchh region. The instability index for yield ranged
from 3.90 (1961 to 1970) for Gujarat state to 31.77 (1961 to 2007)
for North Gujarat region.
15
Anonymous (2010) showing the district wise Area,
Production and productivity in Gujarat state. The trienniu m
average area of 2007 -08 to 2009-10 was 207500ha. Among the m
approximately 91% area i.e. 188500 ha covered by South Gujarat.
The total production of sugarcane of Gujarat state was 1466900 mt.
Among the m 1326600 mt sugarcane is produced only in South
Gujarat (90.44%). The average productivity of sugarcane during
this years was 70.68t/ha. The average productivity of sugarcane in
south Gujarat was 70.29t/ha.
Saraswati et al.(2012) made study on growth in area,
production and productivity of major crops in Karnataka. They
observed that the state Karnataka registered a highly significant
increase in area under sugarcane (4.14 %). Irrigated area growth,
better prices and less labour requirement contributed a lot to the
growth of total area under sugarcane. The sugarcane productio n
was
increasing
at
2.61
per
cent
per
annu m.
The
growth
performance of sugarcane productivity in the state registered a n
increasing growth of 0.45 per cent.
9.2 Performance of sugar factories
Lakshmikantha m (1978) studied the performance of 22
sugar factories in Andhra Pradesh during t he year 1976 -77 and
noted that there was a sharp decline in capacity utilization, sugar
production and percentage sugar recovery in the state due to
cyclones during the year. Inter -sectoral co mparison showed better
performance of the public sector over the co-operative and private
sector sugar factories in the state. However, the performance o f
co-operative sector was improving where as the performance o f
16
private sector declined and that of public sector re mained
unchanged during preceding years.
In anothe r study (1979) he analyzed utilization of
crushing capacity of 8 selected sugar factories in Andhra Prades h
during the period from 1968 -69 to 1976-77. The analysis revealed
cyclical nature of performance of all the factories in the state. The
occasions of shortage of cane were generally observed to coincide
with high prices for sugar and jaggery in the markets. Further, he
concluded that under utilization of capacity coupled with high
prices increased the cost of production of sugar in the lean years o f
the cycle.
Nath and Lalitha (1979) compared the performance o f
sugar factories from various states in India at the end of 1976 -77
crushing season. They observed that state wise trends with regard
to different factors of performance were not uniform. However,
overall position of the states with high percentage of co -operative
sugar factories was generally better than other states. Further, the y
noticed
that
unecono mically
s mall
sized
factories
were
in
operation at many places in the country. The owners of thes e
factories were found to be reluctant to invest in capacity expansio n
as well as in cane development in their operational areas.
Chaturvedi (1986) studied the relative influence o f
various factors on the cost of production of sugar in a co -operative
sugar factory in Punjab. The analysis covering a period of 9 years
from 1976-77 to 1984-85 showed that capacity utilization and
sugar recovery were the most do minant factors which determined
the cost of production of sugar. The price of raw material and
17
technical
efficiency
of
the
factory
were
found
to
have
comparatively low impact on the cost of production of sugar.
Hinge et al. (1989) studied the production performance
of all the 56 co -operative sugar factories in Maharashtra for a
period of 5 years extending from 1977 -78 to 1981-82. The
factories were classified as healthy, medium and sick on the basis
of a healthy index. It was observed that cost of production of sugar
was the highest in case of healthy factories even though they
enjoyed better sugar recovery and capacity utilization percentage.
Further, they noticed that the medium class of factories derived
comparatively higher returns per 100 tonnes of installed crushing
capacity. All the factories under study incurred losses during study
period.
Jadav and Sale (1990) studied the econo mic efficienc y
and capacity utilization in different size groups of co -operative
sugar factories in Maharashtra. They analysed performance of all
the 49 co-operative sugar factories in the state during the time
periods; 1973 to 1975, 1978 to 1980 and 1980 to 1982. The authors
found that the large sized sugar factories produced less sugar per
100 tonnes of installed crushing capacity as compared to mediu m
sized sugar factories. This indicated under utilization of crushin g
capacity of the large factories. The authors also observed that per
cent share of sugarcane in the total cost of produc tion of sugar
declined over the years. The total receipt of the factories did not
increase in production with the cost faced by the factories,
resulting into increase in losses to the factories over the years
under study.
18
Nika m (1992) made an attempt to a nalyse the financia l
performance and cost of production of sugar in 9 selected co operative sugar factories in Maharashtra for a period of 11 years
from 1974-75 to 1984-85. He concluded that all the co -operative
sugar factories were operating below the con ventional standards of
current assets to current liabilities. This indicated poor financia l
strength of the factories. Further, he observed that the factories
were functioning with lower working capital. The inter regiona l
comparison showed better performa nce of the sugar factories fro m
Western Maharashtra over the factories from Central and Nort h
Maharashtra.
Dangat and Ratnaparkhe (1994) made a comparative
study of performance of one healthy and one sick co -operative
sugar factory in Maharashtra from 1983-84 to 1989-90. The y
observed that it was difficult to produce sugarcane with well
irrigation only. Therefore, provision of supplementary irrigatio n
was found to be absolutely essential. They also noticed that large
operational area resulted into incre ased cost of transportation o f
sugarcane and hence s mall and compact area of operation was
found to be beneficial to successful performance of sugar factory.
Patil and Kakade (1998) studied capacity utilization o f
9 selected co-operative sugar factories in Maharashtra for a period
of 13 years from 1980 -81 to 1992-93. The sample consisted o f
three factories each fro m the high, medium and low recovery zones
of the state. They observed that the low recovery zone recorded
highest growth in capacity durin g the period under study. The
medium recovery zone was found to have better and stable
19
utilization of crushing capacity as compared to the other two
zones. The analysis also revealed that all the sugar factories under
study failed to utilize the available days or crushing efficiently.
The results showed that capacity utilization percentage necessary
to achieve break-even of the factories increased over the years.
Das and Mookherjee (2004) sub mitted discussion paper
in Economics entitled as “ Ownership Farm and Contractual
Inefficiency: Comparing Performance of Cooperative and Private
Factories in Indian Sugar Industries ”. In this paper the researchers
explored the role of differing contractual relationships between
sugarcane farmers and sugar factories in In dia resulting fro m
differing ownership structures. In this paper they have examined
the role of varying pattern of organization of processing and
marketing arrange ments for sugarcane in India, associated wit h
different forms of ownership of sugar factories . In conclusion the y
stated the role of institutional factors in the growth process in
manifested by the contrasting responses of factories and growers to
changing pattern of land ownership, technology and price.
Shinde and Herekar (2011) studied the assessment o f
operational efficiency of a leased out sugar cooperative during
cooperative and private manage ment regime. They noted that there
was no significant difference in cane crushing, though the private
manage ment has made available and crushed more sugarcane. The
mean sugar recovery of cooperative management was 11.38% and
that of private management was 12.00%. The private manage ment
has 10% more gross seasons and factory runs 13 days more per
year. During the period of private manage ment fac tory obtained
20
higher sugar recovery. More crushing and more recovery resulted
in higher production of sugar which was main source of revenue
for the enterprise.
Rai (2012) made a study on reviewing performance o f
Indian sugar industry as an economic a nalysis. This paper
attempted to measure the econo mic performance of Indian sugar
industry in terms of capacity utilization measured economically at
aggregate level over a period fro m 1979 -80 to 2008-09. In this
study, optimal output was defined as the min imum point on the
firm‟s short run average total cost curve and the rate of capacit y
utilization was merely ratio of its actual output to capacity output
level. Under choice theoretic fra mework, the results suggested that
a significant variation in the cap acity utilization rates over years
within sa me industry was found. There has been diminishing
capacity utilization growth rate in this industry during post reform
period.
The
impact
of
liberalization
on
economic
capacit y
utilization of Indian sugar industr y was noticed to have significant
negative impact.
9.3 The reasons for sickness of sugar factory
Dhanuka (1976) reported that short supply of sugarcane
was the main cause of sickness in the sugar industry in Bihar. He
observed that high cost of mod ernization of the machinery without
adequate supply of raw material increased the cost of production of
sugar
excessively.
The
other
factors
responsible
for
poor
performance of sugar factories in Bihar were improper land
distribution,
lack
of
infrastructur e,
adoption
of
primitive
21
agricultural practices,
and inefficiencies
in the
co -operative
societies, illiteracy and poverty.
Prasad (1976) took an account of the various problems
faced by the Indian sugar industry in a paper on „Problems and
prospects of sugar industry‟. He remarked that large scale
diversion of sugarcane to the khandsari and gur manufacturing
units, tax disparity between sugar and the two sweetening agents
and unecono mic price structure faced by the sugar industry were
the major causes of sickness in Indian sugar industry.
Lakshmikantham (1979) analysed capacity utilization
performance of 8 selected sugar factories in Andhra Prades h
during the period from 1968 -69 to 1976-77. He opined that lack of
crop planning by the government and the fa ctory management was
one of the main reasons for fluctuations in the production of
sugarcane and sugar in the state. The author further pointed out
that failure of machinery was also responsible for under utilizatio n
of crushing capacity in the state. Decl ine in the percentage sugar
recovery coupled with under utilization of capacity were another
factors contributing to increase in the cost of production of sugar
in the state.
Hinge et al. (1989) studied the production performance
of all the 56 co-operative sugar factories in Maharashtra during the
period from 1977 -78 to 1981-82. The authors found that cost of
production of sugar was highest in case of healthy sugar factories
because of pay ment of higher prices of cane to the cane growers
and absence of rebates in the excise duties. The medium class
factories were observed to receive higher net returns per 100
22
tonnes of the installed capacity as they kept the overhead costs
under control.
Nika m (1992) made a financial and cost analysis of
performance
of
9
selected
co -operative
sugar
factories
in
Maharashtra. He reported that scarcity of raw material, obsolete
technology,
inadequate
lack
of
proper
diversification
a nd
planned
expansion
poor
management
programme,
of
huma n
resources were the main causes of poor performance by the sugar
co-operatives in Maharashtra. The author also opined that the
improper sugar policy of the government also contributed to poor
performance of the factories.
Patel and Ashturkar (1992) explained the various reason
behind the sickness of sugar industry in Marathwada. The y
observed that factories no adequate cane purchased the cane fro m
non share holders either within or outside the jurisdiction. The
limitation on acreage under cane affected the supply of cane to the
factory. According to the authors the loss of working hours due to
cane shortage, mechanical and electrical failures etc. were also
responsible for under utilization of the factory. They also pointed
out that the levy sugar price policy was the major reason for
reduction in the profit.
Pawar and Sale (1994) studied the econo mics of scale in
co-operative sugar industry in Maharashtra. They observed that
under utilization of installed capacity and exces sive overhead cost
withheld the sugar factories in Maharashtra from reaping the
potential advantages of large scale production of sugar. The under
utilization of crushing capacity was found to be a result of
23
constraints on the supply of sugarcane due to lo w productivity o f
sugarcane. The excessive overhead cost in the production of sugar
was found to be appearing due to inefficient management practices
in the co-operative sugar industry in the state.
Baviskar and Rao (1997) explained the various reasons
behind the sickness of co-operative sugar factories in a paper o n
„Sickness in co-operative sugar industry‟. The authors registered
inadequate sugarcane supply to the factories as the main reason
behind the sickness. According to them, technical inefficiency ,
tendency
to
pay
unaffordable
cane
prices
and
practice
of
overstaffing in the co-operative sugar factories resulted into high
cost of production of sugar.
Doshi (1998) reviewed the proble m of sickness in the
sugar factories in Maharashtra in paper entit led „Sickness of sugar
factories in Maharashtra‟. According to him, granting of licenses
to new sugar factories on political ground rather than on econo mic
feasibility conditions has been responsible for the emergence o f
the proble m in the state. Reduction in sugar factories‟ operationa l
area because of emergence of a number of new factories,
mismanage ment of the factories for narrow personal gains of a few
and lack of discipline in monetary manage ment of the factories
were the major reasons responsible for sickness in the industry,
according to the author.
Mane (1998) enlisted various reasons responsible for
sickness of sugar factories in Maharashtra in his paper entitled,
„Sickness of sugar Industries: Reasons, Results and Re medies‟. He
opined that shortage of raw material within the operational area
24
was the main reason responsible for sickness of sugar factories.
Overstaffing,
excessive
unnecessary
expenditure,
technica l
inefficiency and financial difficulties were also reported to be the
causes behind the unsuccessful operation of the factories.
An atte mpt has been made by Jagdishlal et al. (2000) to
analyse the causes responsible for poor performance of sugar
factories in India. The information collected fro m 139 sugar
factories revealed that an e fficient marketing net work and better
development efforts by sugar factories produced encouraging
results in tropical states. Varietal, weather and water stress were
important productivity constraints.
Goel and Kaur (2001) analysed the performance of two
individual sugar mills located in Punjab. They pointed that the
coming up of new sugar mills based primarily on political rather
than econo mic considerations should be discouraged for the
sustainability of their growth. For an optimum utilization of their
capacities such units have to depend upon qualities of cane
supplies upon the other region for which it may succeed only b y
offering higher prices due to higher costs of transportation. Under
utilization capacity of the sugar unit led to be a blocking of their
resources.
A case study was conducted by Nika m (2003) for
Maharashtra state during 1996 -97 to 2001. He observed that on a n
average, the loss of hours due to shortage of sugarcane in
Marathwada region was almost three time more than south and
central zone. The author also noted that loss of hours due to
mechanical and electrical breakdown were registered highest
25
(11.20%) in Parbhani district. Further, he found that while
comparing the three factors together, for judging the utilization o f
plant capacity on an average Maharashtra region had recorded 25%
loss of hours to available hours.
Panda Jadabananda (2007) in his research paper “ The
Privatisation of Nayagarh Sugar Mill – A Right Step Towards The
Revival and Rebuilding of The Sick Enterprise ” has made SWOT
analysis
of
Nayagarh
Sugar
mill
for
two
–
periods
Pre-
Privatisation and Post-Privatisation. In his paper he has tried to
compare
pre -privatization
and
post-privatization
Strengths,
Weaknesses, Opportunities and Threats of the said sugar mill .
After exa mining the case, he found that the reasons for making this
cooperative unit sick were lack of full utilization of production
capacity,
lack
of
encourage ment
and
training
to
sugarcane
cultivators and occurrence of abnormal reasons like breakdown of
machinery during crushing seasons.
An attempt has been made by Lakhdive (2011) to
analyse the problems faced by the sugar factories in Vidarbha. 20
sugar factories were installed in Vidarbha region of Maharashtra
state during a span of last 35 ye ars.
But due to inadequate
sugarcane supply most of the unit except two in co -operative
sector and three in private sector were not working during 2010 11. Thus, the situation has deteriorated to a great extent. Whe n
situation was examined and analyzed cr itically, so me reasons /
limitations
appeared
responsible
for
the
decline
of
sugar
production like, inadequate perennial irrigation in Vidarbha, lack
of use of micro -irrigation, negligence in sugarcane develop ment
26
work, poor sugar factory manage ment, input supply, low sugar
recovery and competition by other commercial crops. To improve
it, some suggestions were offered particularly to increase the area
and
production
of
sugarcane.
Research
support
from
the
agricultural university appears positive, concerted and devoted
efforts will be required from factory manage ment side to improve
the situation and bring it on right track.
9.4 The measures to improve the economic efficiency of sugar
factories
Dhanuka
(1976)
suggested
various
measures
for
improvement of the sugar industry in Bihar. The author suggested
that the sugar factories should first fully utilize their existing
crushing
capacities
rather
than
going
for
modernization of
machinery involving high cost. Further, he stressed for the need o f
varietal impro ve ment of sugarcane crop and provision of better
irrigation and drainage facilities to the farmers.
Prasad (1976) depicted the „Problems and prospects o f
sugar Industry‟ in India and called for a comprehensive policy for
Khandsari, gur and sugar. He recommended that early start o f
crushing by the factories should be encouraged to prevent
diversion of sugarcane to Khandsari and gur making units. Further,
he advocated for regulatory measures on supply of Khandsari,
similar to the monthly quota release of sugar. The author
demanded increase in the statutory minimum support price (SMSP)
of sugarcane, realistic prices for levy sugar and minimization o f
excise duty on sugar.
27
Lakshmikantham
(1978)
analysed
the
decline
in
performance of 22 sugar factories in Andhra Pradesh during the
year
1976-77.
The
author
recommended
that
Research
and
Development wing of sugar factories should be made efficient by
employing qualified staff and by making provision for other
essential facilities. The author also stressed the need for suitable
sugarcane development progra mmes, taking into consideration the
cyclone-prone nature of the climate of the region.
Lakshmikantham (1979) analysed capacity utilization
performance of selected 8 sugar factories in Andhra Pradesh and
reco mmended that it would be desirable to prolong the crushing
seasons in the state to maximize capacity utilization and enhance
profitability. According to him, a crushing season of 140 days was
optimum in the state. He recommend ed that factories should ensure
adequate
supply
of
sugarcane
through
proper
sugarcane
development programmes and cordial relations with the cane
growers.
Chaturvedi
(1986)
made
an
analysis
of
cost
of
production of sugar in a sugar factory in Punjab and advocated that
the cost of production can be reduced by maximizing the
productivity and proper upkeep of the plant machinery. Further, he
suggested that the fixed cost should be reduced through minor
modifications to the plant machinery to increase the capacit y
utilization. He was of opinion that variable cost should be
minimized through use of good quality of raw material and proper
maintainance of the machinery.
28
Chougule (1986) scrutinized the performance of all the
32 sugar factories in Andhra Pradesh during the year 1983 -84. He
suggested that intensive cane development efforts were necessary
throughout the state in order to have assured cane supply and
proper varietal co mbination of the crush. The author observed that
combination of early, midlate and late varieties of the cane in the
proportion of 40:30:30 was ideal for improve ment in the recovery
percentage. The author also called for strict measures against the
khandsari and jiggery manufacturing units
operating in the
operational areas of the sugar factories in the state.
Hinge
performance
of
et
all
al.
the
(1989)
56
analyzed
co -operative
the
sugar
productio n
factories
in
Maharashtra during the period from 1977 -78 to 1981-82. The
authors
advised
for
productivity
of
unproductive
over
special
sugarcane
progra mmes
and
head costs
for
almost
in the
improving
care
sugar
for
the
redu cing
factories.
The y
reco mmended for improve ment in management of the factories to
reduce the losses.
Nika m (1992) made a financial and cost analysis of
performance of 9 selected co -operative sugar factories in the
Maharashtra for a period of 11 years from 1974 -75 to 1984-85. The
author reco mmended for standardization of general, administrative
and non-productive expenses in the factories to reduce the cost of
production of sugar. He also opined that new sugar factories
should
be
exempted
performance.
The
fro m excise
author
felt
that
duty
for
there
improving
was
a
need
their
fo r
29
improvement in the competenc e of the management personnel in
the sugar factories.
Baviskar and Rao (1997) suggested specific remedia l
measures in a paper on „Sickness in co -operative sugar industry'.
The authors stated that improvement in the working of sugar co operatives could be achieved through better manage ment, scientific
inventory control, proper maintainance of factory machinery and a
well-planned
sugarcane
develop ment
progra mme.
They
also
advocated for certain policy changes by the government viz.,
exe mption fro m sugarcane purchase tax and permission of total
free sale for a few years to improve the condition of sick sugar co operatives.
Mane (1998) studied the performa nce of a sick co operative sugar factory in Maharashtra for a period of 6 years form
1989-90 to 1995-96 and suggested specific reco mmendations for
the improve ment in econo mic efficiency of sick sugar factories.
The author pointed out that alongwith proper maintainance of the
machinery and hectic efforts for development of cane in the
factory area, workers and officers were essential to improve
financial position of sick factories.
30
Patil and Kakade (1998) analysed capacity utilization of 9 co operative sugar factories in Maharashtra during the year 1980 -81
to 1992-93. The author cautioned that expans ion of capacity in the
low recovery zone of the state could be hazardous and as such this
should not be encouraged. He also advised the sugar factories to
stay away from the unhealthy co mpetition of paying higher cane
prices. The author recommended establishment of a stabilizatio n
fund at the factory level to ensure remunerative price to farmers in
the year of excess of production and also e mphasized for sincere
cane development progra mmes to avoid fluctuations in the yield
and area under cane.
Jagdishlal et al. (2000) made an attempt to analyse the
causes responsible for poor performance of sugar factories in
India. They pointed out that the existing marketing systems and
cane develop ment progra mme need to be reviewed properly in sub
tropical states.
Nimbkar (1998) viewed the deplorable condition of co operative
sugar
reco mmendations
industry
for
the
in
Maharashtra
improvement
of
and
the
made
various
industry.
He
suggested that special efforts were necessary for increasing the
yield on farms which had recorded low yields in the past. He also
stressed the need for recovery based cane price, abolition of the
zoning policy of the government, proper and justifiable irrigatio n
manage ment and strong research and development efforts. The
author also advised pro motion of sugarbeet as supple mentary raw
material in the production of sugar.
31
Goel and Kaur (2001) analysed the performance of two
individual sugar mills located in Punjab. They suggested that the
government should regularly monitor the working of t he various
sugar mills to get a requisite feedback for the formulation and the
refine ment of its polices. Its role should be facilitative and should
attempt to create healthy and co mpetitive economic environment
for the working of heterogeneous group of un its.
Arbattle (2002) reported that the co -operative sector has
succeeded in establishing larger number of units in course of time.
Main factors of encourage ments were government assistance and
protection to the co -operative units. The author pointed out that
the only solution before the sugar factories to step up performance
efficiency and avail opportunities of processing co -product so that
financial contribution to the industry will improve. They opined
that proper steps should be taken to reduce the co st of production.
Dhanuka (2003) studied the gravity of sugar industry‟s
proble ms in Bihar. During the study period he noted that the
solution to the proble ms are the immediately state government
should take some interest for irrigation, with so me ve ry s mall
expenditure if government uptake their tube wells and channels,
water will be available. If possible, it can be handed over to the
factories. Further, he noted that tax holidays should be given for at
least 10 years as to the new factories for rev iving the sugar
industry there. Taxes such as cane cess (Purchase tax), entry tax,
JDC cane tax etc. should not be charged till the revival of the
industry. The author also opined that sugar prices should not be
32
allowed to go below the cost of production b ecause the sa me will
ultimately affect the cane growers and consumers in the long run.
Divekar,
et
al.
(2011)
studied
the
sugarcane
manage ment and harvesting labour problem with the comparison to
the
last crushing season 2009 -10, this season i.e. 2010 -11
sugarcane, sugar production in Maharashtra increased up to 40 to
50%. Raising of good seed nursery with its multiplication and
maturity wise cane harvesting programmes plays a vital role in
sugarcane management. Now a days sugarcane plantation at 5' row
distance is important, this helps in harvesting the cane by
mechanical harvester and also useful to overcome harvesting
labour problems to some extent.
9.5 The resources productivity of sugarcane crop
Sandeep (2002) made an attempt to an economic
analysis of cropping system in Bidar district of Karnataka. He
pointed out that the per hectare cost of cultivation of sugarcane
was high in case of large farmers ( ` 74,496.82) followed b y
medium farmers(` 69,944.63) and small farmers(` 69,074.82). This
might be due to the higher cost incurred for hired labour, sets,
fertilizers and plant protection che micals by the large farmers.
33
Alibaba (2005) studied econo mics of juggery industry in
Andhra Pradesh. He reported that the total cost of cultivation o f
sugarcane per ha in Visakhapatnam district was `53,370 with
variable cost of ` 39,398 and fixed cost of ` 13,972. The y
accounted for 73.28 per cent and 26.18 per cent respectively.
Padilla
and
Nuthall
(2009)
studied
the
technica l
efficiency in the production of sugarcane in central negros area,
Philippines, to identify the sources of input use efficiency in
sugarcane production. They reported that, under a specification o f
variable returns to scale, the mean technical, scale and overall
technical efficiency were estimated to be 0.7580, 0.9884 and
0.7298, respectively. Input use differences between the technica l
efficient and inefficient farms were highly significant in terms o f
area, seeds and labour inputs. There was no significant difference
in use of fertilizer and power inputs. For many farms labour was
the most binding constraints, followed by land and power inputs
while seeds and NPK fertilizer were not binding.
An
atte mpt
made
by
Na madeva,
et
al.
(2009)
to
profitability analysis of sugarcane based intercropping syste m in
Belgaum district of Karnataka. The focus of the present study was
on econo mic evaluation of the intercropping syste m in Raiba g
taluka of Belgaum district. A sample size of 120 far mer was
selected using random sa mpling method and data were elicited for
the
agriculture
year
2006 -07
through
survey
method.
The
techniques of tabular and functional analysis were e mployed. CS -I
(sugarcane+ maize),
CS -II
(sugarcane+wheat),
CS-III
(sugarcane+checkpea) and CS -IV (sugarcane sole) were the four
34
important sugarcane based cropping syste ms followed in the stud y
area under irrigated conditions, it was found that, per hectare tota l
cost
of
cultivation
(`73,718.28/ha )
(cost
followed
„C‟)
was
by CS -II
(`
found
high
in
71,171.95/ha),
CS -I
CS -III
(`69,707.20/ha) and CS-IV (` 65,692.00/ha). The maximum net
returns were found under CS -I was ` 45,828.05/ha followed by CSIII
(`27,471.97/ha),
CS -II
(`28,840.55/ha)
and
CS-IV
(`13,287.17/ha). Returns per rupee of investment was found to be
highest in CS-I (1.62), followed by CS-III, CS-II and CS-IV wit h
value of 1.39, 1.35 and 1.20 respectively. The results of the
functional analysis revealed that the ratio of MVP to MFC was
greater than unity and nearer to one for machine labour, bullock
labour and FYM under different intercropping systems, indicating
further scope for using additional units of these inputs to increase
gross income. The impact of different intercropping systems o n
cost, return and proble ms viz. Low price of the produce, price
fluctuation, high cost of production, high wages for hired labour
availability, pest and disease infestation, scarcity of own fund and
lack of crop cutting order fro m sugar industry, which lead to
uncertainty of income to t he farmers.
Rao (2010) studied on the economic analysis of value
addition in sugarcane in Andhra Pradesh. The study revealed that
the cost of cultivation of sugarcane is a key factor in deciding the
price of value added products of sugarcane. The cost of cultivation
of sugarcane per ha was ` 1,03,336 with the variable cost ` 72,636
and fixes cost ` 30,700 which accounts for 70 per cent and 30 per
cent respectively. Further, out of total operational cost 65.4 %
35
(`44,710) was incurred on labour charges and 34.6% ( ` 23,653)
was spent on materials. Among the operational cost,
harvesting
charges were the highest(` 17,640) with 17% share, followed b y
seed
material
and
planting
13%
(`
13,400),
weeding
and
intercultivation 8% (` 8,300) and propping 7% ( ` 7,400).
Rao (2012) analyzed the econo mics of yield gap in
irrigated and rainfed sugarcane cultivation in North Coastal Zone
of Andhara Pradesh during 2008 -09 by collecting data on various
aspects of costs and returns. The study has shown that the value o f
BCR was higher for plant crop in irrigated (1.49) than in rainfed
(1.43) regions. The yield gap between irrigated and rainfed regions
has been found to be 67.8 percent, in which input usage had a
higher (41.86%) effect than cultural practices. The most important
constraint in sugarcane cultivation was shortage of labour during
crucial
operations.
Therefore,
irrigated
sugarcane
is
more
remunerative and yields can be sustainable if constraints are
addressed and a proper package of practices is followed.
Deokate (2013) studied on the quantification of yield
gaps in different planting types of sugarcane in Maharashtra. He
analysed nine variables i.e., human labour (X1),bullock power
(X2),
machine
power(X3),Nitrogen(X4),
Phosphorus(X5),
Potash(X6), Manure(X7),Planting material(X8) and weedicide (X9)
included in the production function analysis of suru sugarcane
have jointly explained 74 percent variation in the yield gap. The
regression coefficient of human labour, machine power, nitroge n
and planting material were negative and significant at 5 percent
level of significance, while manure was negative and significant at
36
10 percent level. These negative and significant coefficients
indicated that, one unit increase in the use of human labour,
machine power, nitro gen, planting material and manure will
minimize the yield gap by 0.16, 0.26, 0.03, 0.05 and 2.89 units
respectively. The positive coefficients indicated that the excess use
of these resources which needs to be reduced.
37
METHODOLOGY
III. METHODOLOGY
The research methodology is regarded as foundation of
every scientific study and it needs to be elaborated in detail in
order to facilitate the readers and other research workers. So the y
can understand the conclusions drawn from such a study in their
right perspective.
To
begin
with,
the
researcher
has
to
evolve
an
appropriate approach towards the proble m under study. This
depends primarily on the objectives of the study. The proc ess o f
determining the methodology further involves specifying the
techniques and tools to be used for collection and analysis of the
data. These specifications have to be made, to considering the
nature of the population and the basic purpose of the study .
This chapter is therefore developed to explain the
methodology adopted for the present research work. It is proposed
to discuss the aspects viz., basic approach of the study, selectio n
of sample, method of data collection and analytical techniques
adopted to acco mplish the objectives under study.
The present chapter is devoted to discuss the details o f
research methodology adopted for the study. More ever it deals
with aspects like the source of e mpirical data used in the study, the
analytical procedure is adopted for carrying at meaningful results
for acco mplishing the objectives of the study and various concepts
underlying it. According to this view the methodology be divided
into following parts :
38
 Source of the data
 Selection of the sugar factories and the cultivators
 Performance of sugarcane in South Gujarat
 The econo mic efficiency of the sugar factories
 Cost and returns in production of sugar
 Selection of respondents, methods of collection of data and
statistical methods used for analysis of data
 Cost of cultivation of sugarcane
3.1
Source of data
The study was conducted during the year 2013-14. It
was necessary to obtain data on the various aspects of the sugar
industry in the state. These asp ects included the productio n
performances of the individual co -operative sugar factories, their
cost and returns and other relevant statistics determining the
econo mic efficiency of the sugar factory. As far as the details o f
the sugar at the state level are concerned Directorate of sugar,
Gujarat state, Gujarat Rajya Sahakari Khand Udyog Sangh,
Ahmedabad, Deccan Sugar Association, Pune were important
source of data. The national level information was obtained fro m
the journals viz, “Indian sugar” and “Sugar News”. They publis h
the statistics of sugar industry. The annual reports of the
individual co-operative sugar factories, however proved to be the
main source of the information on sugar production and related
aspects.
The performance of sugarcane crop in the state o f
Gujarat in respect of area, production and yield was studied. The
39
data were collected from season and crop reports, District wise
General
Statistical
Information
of
Agricultural
Department,
“Margdarshika” p ublished by Director of agriculture, Gujarat State
and from Agricultural Situation in India.
The
resource
productivity
of
various
factors
of
production on cultivators‟ field was studied. The data were
collected by arranging personal interview of respond ents growing
sugarcane crop.
3.2
Basic approach of the study
This study analyses growth and performance of selected
co-operative sugar factories, located in South Gujarat region.
The various parameters of performance of the co operative sugar factories viz., capacity utilization, percentage
sugar recovery, cost of production of sugar and cane price etc.
have been thoroughly studied to examine the overall performance
of selected co -operative sugar factories. The performance of eac h
of the factories has been analyzed separately. However, inter
factory comparison have been made to investigate the difference in
the performance of two factories.
As growth is long-term process an analysis of time
series data on the production performance of the sugar facto ries
from 2001-01 to 2011-12 has been carried out.
The study is not merely a statistical analysis. It
attempts to do an exhaustive study of the operative elements to
find out the causes behind the good or poor performance, so as to
reco mmend specific improve ment measures.
40
3.3
Size and nature of the sample
Taking in to consideration the time and resources
constraints faced by a single researcher, it was not feasible to
make a study of all the factories localised in South Gujarat region.
Further, all the factories in the region do not exhibit similar
performance. So me factories are healthy, some are sick in respect
of various parameters of performance. It was therefore, felt
necessary to present these two factories for the purpose of study.
3.4
Selection of sugar factories respondent farmers
In the year 2012-13, 21 co-operative sugar factories were
in production in the state. There were 15 sugar factories in Sout h
Gujarat region still few more factories were registered.
Multi stage rando m sa mpling technique was followed fo r
selection of sugar factories, villages and respondents.
For the selection of sugar factories and other primary
information and data were collected fro m the records of Director
of Sugar, Ahmadabad. All the factor ies in the region were grouped
according to the installed crushing capacity.
One sugar factory from each category according to
crushing capacity was selected for detail study. There is only one
sugar factory having installed crushing capacity of 10,000 tons /
day i.e., Bardoli Co-operative Sugar. Only, Madhi Sugar havin g
installed crushing capacity of 7000 tons/day. There are four co operative
sugar
factories
having
crushing capacity of 5000
tones/day, a mong the m Gandevi co -operative sugar was selected
randomly for the study. There is only one sugar factory which
41
having crushing capacity of 3500 tones/day, i.e., Mahuva co operative sugar factory. There are six co -operative sugar factories
having crushing capacity of 2500 tones/day, a mong the m Maroli
co-operative sugar factory was selected rando mly for stud y
purpose.
Looking to the number of sugar factories, time and
resources at the disposal of the investigator, the study was
restricted to all the sugar factories of the South Gujarat region
only.
Keeping in view of the objectives of the study the
schedule was proposed by consideri ng different aspects of sugar
production. This study was based on primary as well as secondary
data.
For the calculating the cost of production of sugarcane, a
cluster of four villages having major area under sugarcane was
selected from the jurisdiction o f the selected sugar factory. To
fulfill the objectives of the study four villages were selected at
randomly
from
the
respected
co -operative
sugar
factory
jurisdiction. Thus twenty villages were selected.
List of sugarcane growing farmers of the selected villages
were obtained from the zone supervisor of the respected village
area and village talathi cum mantri (village office records). The n
the sugarcane growing farmers in the sample villages were grouped
in three standard size group on the basis of the size of their
operational land holding. These size of groups are s mall (0 -2.00
ha), medium (2.01-4.00 ha) and large (> 4 ha). Considering the
42
size of population, time and resources at the co mmand o f
investigator from each selected villages 12 farmers were selected
randomly. Thus total 240 farmers were selected. The distributio n
of sample farmer over the factories, villages, and cultivators are
presented in Table 3.1.
Table 3.1 :
Name of selected village s with respected cooperative sugar factories jurisdiction.
Co-operative sugar
Bardoli
Madhi
Gandevi
Mahuva
Maroli
Name of village
Sha mpura
Timba
Utara
Gangpur
Bajipura
Surali
Andhatri
Golan
Gandevi
Udvada
Abra ma
Pathri
Kalakva
Ghani
Kosh
Vadiya
Vesma
Kurel
Maroli
Kolasna
No. of farmers
48
48
48
48
48
43
The sample of 240 farmers was selected by the
multistage random sampling technique. From each size group,
suitable number of farmers in probability proportion to total
number of farmers was selected.
The secondary data was collected by personal v isit to
the sugar factories. The data were obtained from the annual reports
and office records of the individual co -operative sugar factories.
The data on factories which is not in annual report will also be
collected by personal contact with the respectiv e M.D. and officers
of the factories. The study covered crushing seasons of sugar
factories for the ten years.
To study the performance of sugarcane in South Gujarat
region in respect of area, production and productivity was studied.
It was studied not only for the state as a whole but also for the
South Gujarat region. The data collected from 1087 -88 to 2010-11
for the state and South Gujarat region. The time series data was
collected from seasonal crop reports and district wise genera l
statistical
information
of
Agriculture
Department
“Margadarshika” published by Govt. of Gujarat. After collection of
time series data the linear and co mpound growth rates were worked
out to see the performance of sugarcane in the State and Sout h
Gujarat region.
3.4
Analytical tools
The collected data were complied and analyzed by
simple tabular method, various statistical techniques to acco mplish
the objectives under study.
44
3.4.1
Growth and performance of the selected co -operative
sugar factories
Growth of the various para meters of the selected co -
operatives
sugar
factories
was
measured
in respect
of the
following:
(i) Total quantity of sugar crushed
(ii) Total sugar produced
(iii) Total area under sugarcane available for crushing
Time series data on the above -mentioned aspects were
used for the purpose of analysis. Linear and compound growt h
rates were estimated for the period from 2000 -01 to 2011-12.
The factors considered for judging the performance o f
the selected sugar factories were as under :
(i)
Percentage capacity utilization
(ii) Percentage sugar recovery
(iii) Per quintal cost of production of sugar, and
(iv) Cane price paid to the farmers
The cost of production of sugar and the structure o f
total cost and returns of the sugar factories studied. This point ca n
be made clear by estimating per quintal cost of production o f
sugar.
3.4.2
Statistical tools
The statistical analysis of the data were conducted by
using following statistical tools. The data collected were analyzed
by tabular method, percentage and various statistical techniques.
45
(i)
Tabular analysis
An in depth analysis of performance of the selected
factories was done fro m the year 2000 -01 to 2012-13. The role o f
various factors affecting the performance of the selected factories
in respect of the various para meters under study was studied by
simple tabular analysis.
(ii)
linear and compound growth rat e
The linear and co mpound growth rates were estimated
to measure the growth of selected co -operative sugar factories and
changes in area, production and productivity for sub period and
overall period. Mean standard error and C.V. will be estimated to
know
the
changes
and
fluctuation in area,
production and
productivity.
Linear equation
Y = a + bx …………..
Linear growth rate (LGR)= b / y x 100
Where= Y= Area(ha), production(mt) and yield(t/ha)
a= intercept
b= regression coefficient
x= year
yˉ=mean of y
y= ab x …… expotential
46
Compound growth rate (CGR) = (b -1) x 100
The
compound
growth
rate
of
area,
production
and
productivity of sugarcane crop were tested at 5% level with the
table value of coefficient correlation (r).
The
co mpound
growth
rates
of
area,
production
and
productivity of sugarcane crop were worked out u sing exponential
function of the form,
Y = A Bx
By taking logarithm of both sides, the equation takes the linear
form:
Log Y = Log A + X Log B
On writing Log A = a, Log B = b and Log Y = y,
The equation becomes
y = a + bx
Where;
y = Dependent variable (area, production and productivity)
x = Time/Year (independent variable)
a = Constant/intercept
b = Regression coefficient of y on x
The co mpound growth rate (r) is = (B -1) x 100
The standard error of the compound growth rate was
calculated using the formula:
47
---------------------------------------------------100B
| [(LogY 2 )-(LogY) 2 /N]-[(X 2 (X) 2 /N](Log B) 2
S.E.(r) = --------  -----------------------------------------------------Log 1 0 e
(N-2) [(X 2 – (X) 2 /N]
Where;
Log 1 0 e = 0.4343
N
= Number of observations
Student „t‟ test was used for testing the significance of the
compound growth rate
r
t = ------------S.E. (r)
Where;
r = compound growth rate
S.E. (r) = standard error of compound growth rate
The significance of CGR was tested at 5 percent and 1
percent level with the table value of coefficient of correlation (r).
Regression analysis
For studying the influence of various independent variables
on cane price actually paid to the farmers following equation was
fitted for each of the selected factories.
Y = a + b 1 x1 , + b 2 x2 + b 3 x3 + u
Where =
Y = Price paid to the growers ( ` /tonnes)
a = Intercept
x 1 = Percentage capacity utilization
48
x 2 = Percentage sugar recovery
x 3 = Percentage to cane crushed fro m the operation area
of the factories
bi = Regression co -efficients
u = error term
Economic efficiency of the sugar factories
The important indicator having direct and indirect bearing o n
the efficiency / inefficiency of the sugar factories was estimated
and compared among the individual in order to find out the reasons
for efficiency of the sugar factories. The main indicators to be
considered as :
1. Requirement
operations
as
of
of
sugarcane
potential
area
of
and
factory.
sugarcane
Details
for
full
regarding
sugarcane area required for full utilization of potential of sugar
factories and actual area under sugarcane cultivation in the
factory location was studied.
2. Sugarcane area and production in factory jurisdiction and out o f
jurisdiction was studied.
3. The study of the gross and net working days, losses in working
days gives a better understanding of the ad ministrative and
technological background of the factories.
4. Crushing efficiency of the sugar factories. The crushin g
efficiency was worked out with the design of crushing capacit y
of different factory with an expected 160 days in a year.
5. Cost and return in production of suga r.
49
Percentage capacity utilization
Capacity utilization percentage = Capacity utilization I x Capacity utilization II
100
Percent Capacity utilization I = Total cane crushed in a season x100
Installed crushing capacity x 160
Percent Capacity utilization II = Total cane crushed in a season x 100
Installed crushing capacity x Actual days in
the season
Cost of cultivation of sugarcane
Cost conce pt
The cost concepts used and the procedure followed in the
analysis of data pertaining to the cost of cultivation of sugarcane
are those which are generally adopted in the farm management
studies. The various cost concepts are derived by agricultural
econo mist which were used while analyzing the data as :
Cost A 1 : It includes
1.
Value of hired human labour.
2.
Value of hired and owned bullock labour.
3.
Value of hired and owned machine labour.
4.
Value of seed (both farm seed and purchased).
5.
Value of manures (owned and purchased).
6.
Cost of fertilizers.
7.
Plant protection charges (insecticide/pesticide).
8.
Irrigation charges.
50
9.
Land revenue.
10.
Interest on working capital.
11.
Miscellaneous expenses.
12.
Depreciation.
Family labours were charged at the rate of hired labour
charges prevailing in the region. Owned bullock labour is taken o n
the basis of hire rate prevailing in the village. The purchased
mannures were valued at the actual price paid by the f armers.
Cost A 2 : Cost A 1 + rent paid for leased in land.
Cost B 1 : Cost A 1 + interest on fixed capital (excluding land)
Cost B 2 : Cost B 1 + rental value of owned land + rent for
leased
land.
Cost C 1 : Cost B 1 + imputed value of family labour.
Cost C 2 : Cost B 2 + imputed value of family labour.
Cost C 3 : Cost C 2 + 10 percent of cost C 2 as management cost.
Cost of production:
Cost of cultivation
Cost of production/ qt = ----------------------------------Quantity of main product
Income measures: Following inco me measures were used:
Gross income: It is the total value of main product as well as
of by product.
GI = (Q m x P m ) + (Q b x P b )
Where,
51
GI = Gross inco me
Q m = Quantity of main product
P m = Price of main product
Q b = Quantity of by product
P b = Price of by product
Returns over variable cost (RVC):
RVC = Gross income - Cost A 1
Farm business income (FBI):
FBI = Gross income – Cost A 2
Family labour income (FLI) and management:
FLI = Gross inco me – Cost B 2
Net income (NI):
NI = Gross inco me – Cost C 2
Returns to Mgt:
Gl – Cost C 3
Returns per rupee (RPR):
Gross inco me
RPR = …………………………….
Cost C 2
The cost of cultivation of sugarcane crop was worked out by
using various cost concepts. The use of different inputs in
production of sugarcane crop and resources use efficiency o n
sample farm was studied. To analyse the resources use efficiency
in sugarca ne crop Cobb – Douglas production function was used.
The different variables used in production function are as under.
Y = F (X 1 , X 2 , X 3 , X 4 , X 5 , X 6 )
Where,
Y = Output in quintals per hectare
X 1 = Quantity of seeds (t/ha)
X 2 = Quantity of FYM (qt/ha)
52
X 3 = Quantity of fertilizer (kg/ha)
X 4 =Bullock labour (pair days/ha)
X 5 = Hired human labour (man days/ha)
X 6 = Number of irrigation per hectare
3.5
General Information about selected co -operative sugar
factories
The general information about selected sugar factories
regarding year of sanction,
year of establishment, crushing
capacity are given in Table - 3.2. Various products of sugar
factories and location of selected factories are shown in Fig. -1 &
2, respectively.
Table - 3.2 : General Information about selected co -operative
sugar factories
Sr.
No.
1
2
3
4
5
Name of Sugar
Bardoli Co-operative
Sugar Factory
Madhi Co -operative
Sugar Factory
Gandevi Co-operative
Sugar Factory
Mahuva Co-operative
Sugar Factory
Maroli Co-operative
Sugar Factory
Year of
sanction
1955
1964
1956
1974
1974
Year of
estab lishment
Sanctioned
capacity
Present
capacity
(to nes /day )
(to nes/ day)
195657
196869
196162
198081
197778
800
10000
1250
7000
400
5000
1250
3500
1250
2500
53
RESULTS
AND
DISCUSSION
IV. RESULT S AND DI SCU SSION
This chapter deals with the findings of the present investigation
which have been arrived at after subjecting the data to necessary
tabulation and analysis keeping in view the objectives of the study.
The findings of the study are discussed in following heads.
4.1
Production behavior and growth rates of sugarcane
4.2
Growth and performance of selected co -operative sugar
factories
4.3
Performance of the selected co -operative sugar factories
4.4
Determinants
of
performance
of
the
selected
co -
operative sugar factories
4.5
Input, cost structure and return analysis of sugarcane
crop
4.6
Resources use efficiency in sugarcane production
4.1
PRODUCTION BEHAVIOR AND GROWTH RATES
OF SUGARCANE
The knowledge of production behaviour and growth trend in area,
production
and
productivity
is
an
important
ingredient
of
perspective planning and policy decisions. Production of a crop is
a resultant function of area and productivity of the crop. The
knowledge of the contribution of area and productivity in the
production of a crop is of immense value in taking of polic y
decisions
pertaining
to
future
productions.
Realizing
this
54
importance, an attempt has been made to exa mine the productio n
behavior and growth rates in area, production and productivity o f
sugarcane at South Gujarat and also at selected respondent
sugarcane growers.
The section has been divided into four sections;
4.1.1
General characteristics of sample farmers
4.1.2
Cropping pattern;
4.1.3
Production pattern; and
4.1.4
Growth rates of area, production, and productivity o f
sugarcane in major producing districts of Gujarat.
4.1.1
General characteristics of sample farmers
The information on general characteristics of the respondent
sugarcane growers has been presented in Table - 4.1.
From the table, it could be seen that the average age of the
respondent sugarcane growers was about 47 years and their major
occupation was agriculture. It could be further observed from the
table that majority of the respondent sugarcane growers were
literate (100 per cent) i.e. 14.00, 38.67 and 27.33 per cent of the
respondent sugarcane growers studied up to primary, high schoo l
and college level education, respectively. This is healthy sign of
education in the respondent sugarcane grower.
55
Table 4.1: General characteristics of sample farmers
Sr.
No.
Particulars
Unit
Small
Medium
Large
Average
Year
43.01
49.23
48.84
47.03
1
Age
2
Occupation
A
On farm
0.96
1.00
1.00
0.99
B
Off farm
0.4
0.00
0.00
0.4
3
Education
A
Illiterate
0
0
0
0.00
B
Literate
109
93
38
80.00
A
Primary
22
16
4
14.00
B
High school
48
50
18
38.67
C
College
39
27
16
27.33
4
Family size
No.
6.31
5.53
5.57
5.80
Ha
1.41
3.04
5.14
3.20
5
Land
holdings
No.
A
Irrigated
1.41
3.04
5.14
3.20
B
Dry land
0.00
0.00
0.00
0.00
0.72
2.69
3.78
2.40
6
Area under
sugarcane
Ha
Source: Field survey.
56
From this table it could also be seen that the average size of the
family of respondent sugarcane growers was 5.80. It was the
highest in s mall size farm group (6.31). The average irrigated area
was 3.20 hectare and average area under sugarcane cultivation was
2.40 hectare.
4.1.2
Cropping pattern
This section highlights the importance of Sugarcane crop in the
cropping pattern of South Gujarat region. The area u nder different
crops of South Gujarat region are presented in Table - 4.2.
It is evident from the table that the gross cropped area was 972060
hectares in South Gujarat of which field crops, fruits, flowers and
vegetables contributed 833200, 130419, 5941 a nd 2500 hectare,
respectively. In percentage terms total field crops, fruits, flowers
and vegetables contributed 85.93, 13.45, 0.61 and 0.25, per cent
respectively. Rice was the major field crop of the study area
contributing 28.43 per cent of total croppe d area which was
followed by sugarcane (18.70 per cent), cotton (17.32 per cent).
Mango was the major fruit crop which was followed by banana,
sapota, cashew nut and papaya crop.
57
Table 4.2: Cropping Pattern of South Gujarat Region
Sr. No.
A
1
2
3
4
5
6
7
8
9
10
11
12
13
B
1
2
3
C
1
2
3
4
5
6
7
8
9
10
D
Particulars
Field crops
Sorghum
Pearl millet
Rice
Maize
Mung
Urd
Groundnut
Sesamum
Castor
Rapeseed & Mustard
Cotton
Sugarcane
Wheat
Total
Vegetable Crops
Onion
Garlic
Chillies
Total
Fruit Crops
Mango
Sapota
Citrus
Banana
Papaya
Custard apple
Aonla
Cashew Nut
Coconut
Guava
Total
Flower Crops
Total
South Gujarat
Area (ha)
Per cent
79500
2800
275700
15900
12700
21700
28800
3400
7600
200
168000
181400
35500
833200
8.19
0.28
28.43
1.63
1.30
2.23
2.97
0.35
0.78
0.02
17.32
18.70
3.66
85.93
1500
400
600
2500
0.15
0.04
0.06
0.25
68050
12033
280
35285
3692
210
159
6789
3526
395
130419
5941
972060
7.01
1.24
0.02
3.63
0.38
0.02
0.01
0.70
0.36
0.04
13.45
0.61
100.00
58
4.1.3
Production pattern
The production under different crops of South Gujarat was given in
Table - 4.3.
Table 4.3: Production Pattern of South Gujarat Region
Sr. No.
Particulars
South Gujarat
Production (MT)
Per cent
A
Field crops
1
Sorghum
86900
1.58
2
Pearl Millet
5700
0.10
3
Rice
578900
10.18
4
Maize
23200
0.40
5
Mung
6100
0.10
6
Urad
13500
0.23
7
Groundnut
46300
0.81
8
Sesamum
900
0.01
9
Castor
14400
0.25
10
Rapeseed & Mustard
300
0.002
11
Cotton
332000
5.83
12
Sugarcane
1287200
22.63
13
Wheat
79600
1.39
Total
2475000
43.52
B
Vegetable Crops
1
Onion
43100
0.75
2
Garlic
1800
0.03
3
Chillies
600
0.01
45500
0.80
Total
59
C
Fruit Crops
1
Mango
479265
8.42
2
Sapota
111592
1.96
3
Citrus
3356
0.05
4
Banana
2250860
39.58
5
Papaya
190985
3.35
6
Custard apple
2011
0.03
7
Aonla
1000
0.01
8
Cashew Nut
21098
0.37
9
Coconut
33826
0.59
10
Guava
6013
0.10
Total
3100006
54.51
66078
1.16
5686584
100.0000
D
Flower Crops
Total
From the Table 4.3 we can observe that the total production was
5686584 M.T. in South Gujarat of which total field crops, fruits,
flowers and vegetables contributed 2475000, 3100006, 66078 and
45500 M.T., respectively and the per cent share in total produc tio n
was 43.52, 54.51, 1.16 and 0.80 per cent contributed by field
crops, fruits, flowers and vegetables, respectively.
4.1.4
Growth rate of area, production and productivity of
Sugarcane in major producing districts of Gujarat
In this section, growth rates of area, production and productivity
of sugarcane in the major sugarcane growing districts of the state
and for the state as a whole has been presented in the Table -4.4.
Acreage under sugarcane crop in the state increased sig nificantly
60
at a compound rate of 1.55 per cent per annum during the study
period.
Table 4.4: Compound Growth Rates of Area, Production and
Productivity of Sugarcane Crop in Selected Districts of Gujarat
during 1988-89 to 2011-12
Sr.
No.
Particulars
Compound Groth Rate
Area
Production Productivity
**
-4.66 * *
-1.54 * *
1
Ahmedabad
-3.17
2
Banaskantha
-1.33 * *
-6.54 * *
-5.29 * *
3
Bharuch
4.92 * *
6.01 * *
1.04 *
4
Kheda
-4.04 * *
-8.90 * *
-5.06 * *
5
Narmada
10.09 * *
15.48 * *
4.89 * *
6
Navsari
14.54 * *
20.02 * *
4.78 * *
7
Panchmahal
-0.01 n s
0.70
1.97
8
Sabarkantha
-4.21 * *
-8.89 * *
-4.89 * *
9
Surat
1.28 * *
0.94 * *
0.33 *
10
Vadodara
4.53 * *
3.95 * *
-0.56 * *
11
Valsad
-1.24
-1.65 * *
-0.41 * *
12
Amreli
-7.96 * *
-8.28 * *
-0.41
13
Bhavnagar
-3.35 * *
-5.11 * *
-2.04 *
14
Jamnagar
-0.75
-1.18
-0.43
15
Junagadh
0.38
0.90
0.52 *
16
Kutch
-2.14 * *
-2.07
0.03
17
Rajkot
-4.85 * *
-5.45 * *
-0.86
**
**
-0.91
18
Surendranagar
-3.78
19
Gujarat
1.55 * *
** =
-4.65
1.28 * *
0.27 *
Significant at one per cent level of significance.
* = Significant at five per cent level of significance.
61
The estimates of growth rate revealed that sugarcane
area
in districts of South Gujarat shows
the positive and
significant trend. The area of sugarcane increased at the 14.54,
10.09, 4.92, 1.28 per cent per annum in Navsari, Narmada,
Bharuch and Surat districts, respectively. Panchmahal, Valsad,
Jamnagar and Junagadh districts shown non significant trend in
area. In all other districts the area of sugarcane was decreased
significantly at by -1.33 to -7.96 per cent per annum.
The estimates of growth rates revealed that sugarcane
production significantly increased in the state at a compound rate
of 1.28 per cent per annum. Among the selected districts,
production of sugarcane increased by 6.01, 15.48, 20.02, 0.94, and
3.95 per cent per annum in Bharuch, Narma da, Navsari, Surat and
Vadodara districts, respectively. Panchmahal, Jamnagar,Junagad h
and Kutch districts shown non significant trend in sugarcane
production. In other districts the production of sugarcane was
significantly decreased by -1.65 to -8.90 per cent per annum.
Productivity
of
sugarcane
crop
was
significantly
increased by 0.27 per cent per annum in the state. Among the
selected districts, productivity increased significantly in Bharuch,
Narmada, Navsari and Junagadh districts. There has been decline
in productivity of sugarcane crop in Ahmedabad, Banaskantha,
Kheda, Sabarkhantha, Surat, Vadodara, Valsad and Bhavnagar
districts. In the other districts of the state, productivity o f
sugarcane
shown non significant
trend.
The
results
are
in
conformity with the earlier results reported by Kalola et al (2009).
62
4.2
Growth and performance of the selected co -operative
sugar factories
The analysis of growth and performance of the selected
co-operative sugar factories is pertinent to take a resume of the
profitability exhibited by the selected co-operative sugar factories
during the study period i.e. 2001 -02 to 2012-13. Such a resume, in
respect of certain specific parameters will strengthen the analysis
of determinants of good growth or slow or poor growth of the
factory under study.
4.2.1
Growth rate
Growth is multidimensional and long term process. The
following parameters were considered to ascertain the growth o f
the selected co-operative sugar factories.
(i)
Total cane crushed by the factories,
(ii)
Total sugar produced,
(iii)
Area under sugarcane available for crushing.
Simple linear and co mpound growth rates in respect of
each
of
the
sugar
factories,
selected
on
above
mentioned
para meters were calculated considering the years of study period
i.e. 2001-02 to 2012-13. For this purpose, time series data fro m the
respective year of the selected co -operative sugar factory have
been utilized.
The
growth
rate
exhibited
by the
selected
sugar
factories during study period have been presented in the Table5.1.
63
Table-4.5 : Simple linear and compound growth rates of the
factories during 2001-02 to 2012-13
Item
Per cent growth rates
R2
Compound
R2
0.52
0.07
0.69
0.31
0.25
0.02
0.28
0.85
0.07
0.01
0.30
0.07
Linear
Bardoli co-operative sugar factory
Total sugarcane
crushed (tonnes)
Total sugar produced
(quintals)
Sugarcane area
available for crushing
(ha.)
Madhi co-operative sugar factory
Total sugarcane
1.43
0.12
1.92*
0.44
crushed (tonnes)
Total sugar produced
0.88
0.05
1.40*
0.32
2.76*
0.33
3.01**
0.70
(quintals)
Sugarcane area
available for crushing
(ha.)
Gandevi co-operative sugar factory
Total sugarcane
crushed (tones)
1.17
0.12
1.01*
0.39
Total sugar produced
1.37
0.17
1.15*
0.47
1.10
0.22
1.04*
0.45
(quintals)
Sugarcane area
available for crushing
(ha).
64
Mahuva co-operative sugar factory
Total sugarcane
crushed (tones)
Total sugar produced
(quintals)
-0.54
0.11
-0.10
0.06
-1.03
0.04
-0.59
0.08
Sugarcane area
available for crushing
(ha).
1.75
0.19
2.06**
0.67
Maroli co-operative sugar factory
Total sugarcane
6.62
0.29
6.99*
0.49
crushed (tones)
Total sugar produced
6.63
0.23
6.74*
0.42
4.98
0.20
6.99*
0.49
(quintals)
Sugarcane area
available for crushing
(ha).
** Indicate significant 1 per cent level
*
Indicate significant 5 per cent level
The data pertaining to the total cane crushed, total sugar
produced and area under sugarcane available for crushing for all
the selected co -operative
factories under
consideration were
analysed for linear and compound growth rates.
4.2.1.1 Growth exhibited by the Bardoli co -operative sugar
factory
The Table 4.5 showed that, annual percentage linear
growth rate exhibited by Bardoli co -operative sugar factory in
respect of total sugarcane crushed, sugar produced and area under
crushing
were
0.52,
0.25
and
0.07
per
cent
per
annum,
65
respectively. The respective compound growth rates for these
para meters were 0.69, 0.28 and 0.30 per cent per annum. The
linear growth rate and c ompound growth rate was found non significant because Bardoli sugar pertaining continuous good
performance in respect of sugarcane crushed, sugar produced and
sugarcane area available for crushing during study period (2001 -02
to 2012-13).
4.2.1.2
Growth exhibited by the Madhi co-operative sugar
factory
The annual linear growth rate observed in case of the
Madhi co-operative sugar factory with respect of total sugarcane
crushed, sugar produced and area available for crushing were
1.43, 0.88 and 2.76, respectively. The sugarcane area available for
crushing was found significant at 5 per cent. The co mpound growt h
rate in respect of total cane crushed, sugar produced and area
available for crushing were 1.92, 1.40 and 3.01, respectively. The
total sugarcane crushed and sugar produced was found significant
at 5 per cent level, where as the area available for cane crushing
was found significant at 1 per cent. The data shows that the area of
sugarcane increased and hence cane crushed and sugar produced by
Madhi sugar factory was increased.
4.2.1.3
Growth exhibited by Gandevi co-operative sugar
factory
The annual percentage linear growth rate exhibited by
Gandevi co-operative sugar factory in respect of total sugarcane
crushed, sugar produced and sugarcane area available for crushing
66
were 1.17, 1.37 and 1.10 per cent per annum, respectively. The
respective co mpound growth rate for these para meters were 1.01,
1.15 and 1.04 per cent per annum. The linear growth rate was
found non-significant where as the compound growth rate was
found significant at 5 per cent level. This suggest that growth in
cane crushed and sugar produced have been achieved both due to
an increase in area under sugarcane and better yield of sugarcane
in successive crushing season during the study period i.e. 2001 -02
to 2012-13.
4.2.1.4
Growth exhibited by Mahuva co -operative sugar
Factory
The annual linear growth rate observed in case of the
Mahuva co-operative sugar factory with respect of total sugarcane
crushed, sugar produced and sugarcane area available for crushing
were -0.54, -1.03 and 1.75 respectively. The compound growth rate
for all these para meters was -0.10, -0.59 and 2.06 respectively.
The sugarcane area available for crushing was found signif icant at
1 per cent level. Although the cane crushed and sugar produced
was
found
non-significant
because
of
poor
productivity
of
sugarcane in the area of Mahuva co -operative sugar factory.
4.2.1.5
Growth
exhibited
by
Maroli
co -operative
sugar
factory
The table showed that annual percentage linear growt h
rate exhibits by Maroli co-operative sugar factory in respect of
sugarcane crushed, sugar produced and sugarcane area available
for crushing were 6.62, 6.63 and 4.98 per cent per an num,
67
respectively. The respective comp ound growth rate for these
para meters were 6.99, 6.74 and 6.99 per cent per annum. The
linear growth rate was found non-significant where as the
compound growth rate was found significant at 5 per cent level.
This suggest that the growth in case of cane crushed, sugar
produced and area available for crushing is increased.
4.3
Performance
The present section of this chapter is concerned wit h
the study of performance of the selected co -operative sugar
factories in respect of the following para meters:
4.3.1
Percentage capacity utilization
4.3.2
Percentage sugar recovery
4.3.3
Per quintal cost of production of sugar
4.3.3
Cane price paid to the farmers
A
co mparison
between
the
average
values
of
performance exhibited by the selected co -operative sugar factories
has
been
made
to
know
whether
the
differences
in
their
performance are significant or otherwise. The reasons behind the
differences will be discussed in the next chapter.
The performance of all the sugar factories in the
country is found to have high variations due to the incidence of the
'sugar cycle'. Thus, for a proper assessment of performance, the
co-efficients of variation has also been estimated. Therefore, the
discussion on each para meter of performance is also divided into
(A) Average performance and (B) Variations in performance.
68
4.3.1
Percentage capacity utilization
The capacity utilization is one of the most important
factor determining the overall performance of a sugar factory. Th e
under-utilization of installed capacity results into decline in
production and increase in per quintal cost of production of sugar.
It also results into wastage of the capital investment and thereby
affects the overall good growth of the factory.
Capacity utilization of sugar factory in a particular
crushing season is generally measured by following two methods.
(I) Conventional method
Percentage capacity utilization =
Total cane crushed in a season
x 100
Installed crushing capacity x 160 days
(II) Modern method
Percentage capacity utilization =
The
Total cane crushed in a season
x 100
Installed crushing capacity x Actual crushing days in the season
sugar
industry
is
a
seasonal
industry.
The
conventional formula assumes an optimum season of 160 days and
judges the capacity utilization performance of a factory against the
expected optimum value of crushing that can be achieved in 160
days of crushing.
The modern method, on the other hand consider the
actual crushing days in a particular season while judging the
capacity utilization. The
modern
method thus
measures the
efficiency of crushing during a crushing season.
Throughout this studies the terms capacity utilization -I
and capacity utilization-II were used to denote the capacit y
69
utilization percentage obtained through the conventional method
and the modern method, respectively.
4.2.1.1
Percentage capacity utilizati on during recent period
The performance of the selected co -operative sugar
factories in respect of percentage capacity utilization during the
period
from
2008-09
to
2012-13
has
been
presented
in
Table-4.6 (A).
(A)
Average capacity utilization
The
Table-4.6 (A) revealed that average capacit y
utilization-I of the Bardoli, Madhi,Gandevi, Mahuva and Maroli
co-operative sugar factory was 111.85, 102.55, 131.93, 104.85 and
80.90 per cent, respectively. The average capacity utilization -I o f
the Gande vi co-operative sugar factory was highest than the other
selected
co-operative
utilization-I
of
the
sugar
Maroli
factories.
The
co-operative
average
sugar
capacit y
factory
was
significantly lower than that of the other selected co -operative
sugar factories. Capacity utilization of 100 per cent is generally
considered to be optimum. Therefore, the performance of the
Gandevi and Bardoli co-operative sugar factory was above the
standard norm whereas Madhi and Mahuva sugar factories also just
above the optimum level. The performance of Maroli co -operative
sugar factory was below the optimum.
70
Table-4.6 (A) : Average capacity utilization of selected co operative sugar factories during recent period (2008 -09 to
2012-13).
Sr.
No.
Name of factory
Percentage
Capacity
Percentage
Capacity
utilization-I utilization-II
1
Bardoli
co-operative
sugar
111.85
97.37
co-operative
sugar
102.55
97.09
co-operative
sugar
131.93
117.01
co-operative
sugar
104.85
98.45
co-operative
sugar
80.96
84.33
factory
2
Madhi
factory
3
Gandevi
factory
4
Mahuva
factory
5
Maroli
factory
Average capacity utilization -II of Gandevi co-operative
sugar was found to be 117.01percent. Average capacity utilization II of all other selected co-operative sugar factories was found to
below better 100 per cent. Moreover, average capacity utilization II of the Bardoli, Madhi and Mahuva co -operate sugar factories
was
near
about
100
percent
ie,
97.37,
97.07,
and
98.45
respectively. The capacity utilization of Maroli sugar was only
84.33 per cent, which was much below than standard norms. The
better performance of Gandevi co -operative sugar factory in
respect of capacity utilization -II imparts a better position than the
other co-operative sugar factories. The performance of the Maroli
71
co-operative sugar factory was much below the standard norm,
when measured through both the methods. This is clearly evident
from the study that the performance of M aroli sugar factory was
poor as compared to other selected co -operative sugar factories.
These results are in conformity with the earlier results
reported by Hinge et al. (1989) for the state of Maharashtra for
different classes of factories.
(B)
Variation in capacity utilization
For proper assessment of capacity utilization, it was
felt necessary to exa mine the variations in performance along wit h
the average values. Table -4.6 (B) shows that coefficient o f
variation in crushing capacity utilization -I of the Bardoli, Madhi,
Gandevi, Mahuva and Maroli co -operative sugar factories during
the year 2008 -09 to 2012-13 was 5.09, 7.55, 9.69, 19.38 and 17.89
per cent, respectively. This indicates large variation in the
performance
of
the
Mahuva
and
Maroli
co -operative
sugar
factories as co mpared to other co-operative sugar factories.
Coefficient of variation in capacity utilization -II of Bardoli,
Madhi, Gandevi, Mahuva and Maroli co -operative sugar factory
was8.48, 18.54, 5.25, 9.25 and 15.89 respectively.
Variation in capacity utilization indicates the extent to
which performance of sugar factory is affected by the 'sugar cycle'.
Comparatively less variations in case of the Gandevi co -operative
sugar factory was recorded. Large variation observed in Madhi and
Maroli sugar factories o f capacity utilization–II due to the effects
of the sugar cycle.
72
Table-4.6 (B) : Co-efficient of variation in capacity utilization
percentage (2008 -09 to 2012-13)
Sr.
No.
1
2
3
4
5
Name of factory
Bardoli co-operative
factory
Madhi co-operative
factory
Gandevi co-operative
factory
Mahuva co-operative
factory
Maroli
co-operative
factory
4.3.1.2
sugar
CV (%)
Capacity
Capacity
utilization-I utilization-II
5.09
8.48
sugar
7.55
18.54
sugar
9.59
5.25
sugar
19.38
9.25
sugar
17.89
15.89
Percentage capacity utilization during whole period
The Table 4.7 (A) presents the capacity utilizatio n
performance of the selected sugar factories during the period fro m
2001-02 to 2012-13.
A.
Average capacity utilization
The Table 4.7 (A) showed that duri ng 2001-02 to 2012-
13, capacity utilization-I of the Gandevi co -operative sugar factory
was highest (126.91 per cent) and lowest of the Maroli co operarive sugar factory (74.19 per cent). The capacity utilization –
I for Bardoli, Madhi, and Mahuva sugar fac tories was 110.04,
100.02, and 111.60 per cent, respectively. The capacity utilizatio n
of 100 per cent is generally considered to be optimum. Therefore,
73
the performance of the all the co -operative sugar factories was
above the standard norm except Maroli co-operative sugar factory.
Table-4.7 (A) : Average capacity utilization percentage during
whole period (2001 -02 to 2012-13)
Sr.
No.
1
Name of factory
Bardoli
Capacity
utilizationI
Capacity
utilizationII
co-operative
sugar
110.04
98.24
co-operative
sugar
100.02
93.82
co-operative sugar
126.91
112.79
factory
2
Madhi
factory
3
Gandevi
factory
4
Mahuva
factory
co-operative sugar
111.60
103.52
5
Maroli
co-operative
74.19
77.88
sugar
factory
Average capacity utilization-II of the Gandevi co operative sugar factory was also found to be highest (112.79 per
cent) and lowest for Maroli sugar factory (77.88 per cent). The
capacity utilization-II for Bardoli, Madhi and Mahuva sugar
factories was 98.24, 93.82, and 103.52 per cent, respectively. In
the case of Maroli co-operative sugar factory, the capacit y
utilization –II was more than capacity utilization –I in both the
periods because the sugar factory‟s actual running days was less
than 160 days.
74
B.
Variation in capacity utilization
The Table 4.7 (B) revealed that, coefficient of variatio n
in capacity utilization-I for Bardoli, Madhi, Gandevi, Mahuva and
Maroli co-operative sugar factories was 6.90, 15.06, 12.05, 19.07
and 44.45 and capacity utilization-II was 5.63, 16.65, 7.40, 6.71,
and 22.80 per cent, respectively. The high coefficient of variatio n
in case of the Maroli and Madhi co -operative sugar factories in
both capacity utilization I and II, reflects a high fluctuating nature
of capacity utilization.
Table-4.7 (B): Co-efficient of variation in capacity utilization
(2001-02 to 2012-13)
Sr.
No.
1
Name of factory
Bardoli
CV (%)
Capacity
utilization-I
Capacity
utilization-II
co-operative
sugar
6.90
5.63
co-operative
sugar
15.06
16.65
co-operative sugar
12.05
7.40
factory
2
Madhi
factory
3
Gandevi
factory
4
Mahuva
factory
co-operative
sugar
19.07
6.71
5
Maroli
co-operative
sugar
44.45
22.80
factory
From the study of average capacity utilization -I and II,
it is cleared that the better performance of Gandevi co -operative
sugar factory in respect of capacity utilization –I and II imparts a
75
Fig-3 : Capacity Utilization - I
131.93
140
126.91
111.85
120
110.04
111.6 104.85
102.55
100.02
100
80.96
74.19
80
60
40
20
0
Bardoli sugar 10000 mt
Madhi sugar 7500 mt
Gandevii sugar 5000 mt
Capacity Utilization - I - 2001-02 to 2012-13
Mahuva sugar 3500 mt
Maroli sugar 2500 mt
Capacity Utilization - I - 2008-09 to 2012-13
Fig-4 : Capacity Utilization - II
117.01
112.79
120
98.24
100
103.52 98.45
97.09
97.37
93.82
84.33
77.88
80
60
40
20
0
Bardoli sugar 10000 mt
Madhi sugar 7500 mt
Gandevii sugar - Mahuva sugar 5000 mt
3500 mt
Capacity Utilization - II - 2001-02 to 2012-13
Maroli sugar 2500 mt
Capacity Utilization - II - 2008-09 to 2012-13
better position than the other co -operative sugar factories . The
performance of the Maroli co -operative sugar factory was muc h
below the standard norm, when measured through both the
methods. This is clearly evident from figure -3, which showed the
capacity utilization-I of selected sugar factories during both the
periods under study. Similar trend is also visible fro m the figure -4,
which presents the average capacity utilization -II of the selected
co-operative sugar factories.
4.3.2
Sugar recovery
After capacity utilization, sugar recovery is the next
most importa nt factor influencing the economic efficiency of a
sugar factory. Both these factors act simultaneously to determine
the cost of production of sugar and cane price payable to the cane
growers.
Improvement in sugar recovery percentage reduces the
per quintal cost of production of sugar. The variable cost is
reduced as the same quantity of sugarcane produces more quantit y
of sugar. There is also less expenditure on che micals and other
inputs used in the production of the sugar. The per unit fixed cost
is also reduced as it gets divided over more number of units o f
production. The percentage sugar recovery is calculated b y
following formula:
Total sugar produced
Percentage sugar recovery =
x 100
Total cane crushed
76
4.3.2.1
Percentage sugar recovery (recent period)
Performance of the selected sugar factories in respect o f
percentage sugar recovery during the period from 2008 -09 to 201213 has been depicted in Table -4.8 (A).
A.
Average sugar recovery percentage
The
Table-4.8
(A)
shows
average
sugar
recovery
percentage of the selected co -operative sugar factories during the
year 2008-09 to 2012-13.
Table-4.8 (A) : Average sugar recovery during recent period
(2008-09 to 2012-13)
Sr.
No.
Name of co-operative sugar factory
Av. sugar
recovery (%)
1
Bardoli co-operative sugar factory
10.85
2
Madhi co-operative sugar factory
10.50
3
Gandevi co-operative sugar factory
11.44
4
Mahuva co-operative sugar factory
10.56
5
Maroli co-operative sugar factory
9.87
The average sugar recovery percentage of the Gandevi
co-operative sugar factory was highest (11.44 per cent) and it was
lowest of the Maroli co-operative sugar factory (9.87 per cent).
The average sugar recovery percentage of Bardoli, Madhi and
Mahuva sugar factories was 10.85, 10.50 and 10.56 per cent,
respectively.
B.
Variation in the percentage sugar recovery
The Table 4.8 (B) shows that the coefficient o f
variation in sugar recovery percentage in case of the Bardoli,
77
Madhi, Gandevi, Mahuva and the Maroli co -operative sugar
factory was 3.28, 1.38, 2.49, 1.84 and 1.63
respectively. Higher
average sugar recovery percentage confirms the superior positio n
of the Gandevi co -operative sugar factory. The Maroli co -operative
sugar factory found weak position due to lower sugar recovery
percentage realized by it during the year 2008 -09 to 2012-13.
Table-4.8 (B) : Co-efficient of variation in sugar recovery
percentage (2008 -09 to 2012-13)
Sr.
No.
Name of sugar factory
C.V.%of sugar
recovery
1
Bardoli co-operative sugar factory
3.28
2
Madhi co-operative sugar factory
1.38
3
Gandevi co-operative sugar factory
2.49
4
Mahuva co-operative sugar factory
1.84
5
Maroli co-operative sugar factory
1.63
4.2.2.2
Percentage sugar recovery (whole period)
The
data
depicted
in
Table -4.9(A)
indicated
the
performance of selected factories in respect of sugar recovery
percentage during the whole study period from 2001 -02 to 201213.
A.
Average sugar recovery percentage
The
Table -4.9
(A)
denotes
the
sugar
recovery
percentage observed in the Bardoli, Madhi, Gandevi, Mahuva and
Maroli co-operative sugar factory over the entire study period. It
was 10.97, 10.73, 11.50, 10.77 and 10.03 per cent, respectively.
78
Table-4.9 (A) : Average sugar recovery percentage during
whole period (2001 -02 to 2012-13)
Sr.
No.
Name of co-operative sugar factory
Av.sugar
recovery(%)
1
Bardoli co-operative sugar factory
10.97
2
Madhi co-operative sugar factory
10.73
3
Gandevi co-operative sugar factory
11.50
4
Mahuva co-operative sugar factory
10.77
5
Maroli co-operative sugar factory
10.03
From this table we can revealed that the average sugar recovery
was decreased during the recent period (table 4.8(A)).
B.
Variation in the percentage sugar recovery
The Table -4.9 (B) showed that the coefficient o f
variation in sugar recovery percentage in case of the Bardoli,
Madhi, Gandevi, Mahuva and Maroli co -operative sugar factory
was 2.53, 2.99, 2.37, 2.50 and 4.15, respectively. The performance
of the Maroli co -operative sugar factory was more fluctuated
followed by the Madhi co -operative sugar factory. Gandevi sugar
factory had less variation in the performance of sugar recovery
percentage.
To sum up, it was noted that, the position of the
Gandevi co-operative sugar factory with respect to other factories
was found superior over the short -run as well as the long-run
period considered for the study, because of the better post
harvesting and transportation management of harvested sugarcane.
79
Fig 5 : Average sugar recovery of selected sugar
factories
11.50
11.50
10.97
11.00
10.85
11.44
10.77
10.73
10.56
10.50
10.50
10.03
10.00
9.87
9.50
9.00
Bardoli
Madhi
Gandevi
Mahuva
Maroli
Average sugar ricovery of selected sugar factories Average - 2001-02 to 2012-13
Average sugar ricovery of selected sugar factories Average - 2008-09 to 2012-13
Gandevi and Bardoli sugar factory managed vehicle (truck) at
every 11 hours during harvesting so recovery losses was minimized
(R. Nandkumar, 2011).
The performance of the Gandevi co -operative sugar
factory was highly satisfactory as compared to the other co operative sugar factory. This is clearly visible fro m figure -5 whic h
presents the average sugar recovery percentage of both the
factories under study during both the periods. This findin g is
supported by Hinge et al. (1989).
Table-4.9 (B) : Co-efficient of variation in sugar recovery
percentage (2001 -02 to 2012-13)
Sr.
No.
Name of sugar factory
C.V.%of sugar
recovery
1
Bardoli co-operative sugar factory
2.53
2
Madhi co-operative sugar factory
2.99
3
Gandevi co-operative sugar factory
2.37
4
Mahuva co-operative sugar factory
2.50
5
Maroli co-operative sugar factory
4.15
4.3.3
Cost of production of sugar
Per quintal cost of production of sugar bears an inverse
relationship with the health and well -being of a sugar factory. It
reflects collective results of performance of various departments o f
a factory. Inco me and profitability of a factory is severely
ha mpered if the per quintal cost of production of sugar is
excessively high.
80
4.3.3.1
Per quintal cost of production of sugar during recent
period
The Table -4.10 (A) presents the performance of the
selected sugar factories in respect of the per quintal cost o f
production of sugar during the period from 2008 -09 to 2012-13.
A.
Average per quintal cost of production of sugar
The Table-4.10 (A) indicates that the average per
quintal cost of production of sugar, including the cost of cane and
without the cost of cane. The highest cost of production of sugar
per quintal including cost of cane was of Maroli co -operative sugar
factory
(`3064.84/ha.),
followed
by
Gandevi
sugar
factory
(`2976.68/ha.). The cost of sugar production including cane cost
per quintal for Bardoli, Madhi and Mahuva co -operative sugar
factories
were
`2973.30/ha.,
`2954.92/ha.
and
`2918.50/ha.,
respectively. The cost of sugar production excluding cane cost also
found highest in case of Maroli sugar factory ( `658.40/ha.),
followed by Mahuva co-operative sugar factory (`499.38/ha.). The
cost of sugar production excluding cane cost per quintal for
Bardoli, Madhi and Gandevi co -operative sugar factories were
`364.93/ha., `457.02/ha. and `344.31/ha., respectively.
The lowest cost of sugar production excluding cane cost
was observed in case of Gandevi sugar factory. Which indicated
the production process and management in case of Gandevi sugar
factory was most efficient.
81
Table-4.10 (A) : Average per quintal cost of production of
sugar during recent period ( 2008 -09 to 2012-13)
Sr.
No.
Name of factory
Per quintal cost of
production (`)
Including
Excluding
cost of cane cost of cane
1.
Bardoli co-operative sugar factory
2973.30
364.93
2.
Madhi co -operative sugar factory
2954.92
457.02
3.
Gandevi co-operative sugar factory
2976.68
344.31
4.
Mahuva co-operative sugar factory
2918.50
499.38
5.
Maroli co-operative sugar factory
3064.84
658.4
Thus, the average per quintal cost of production of
sugar, including the cost of cane and excluding the cane cost was
highest in case of the Maroli co -operative sugar factory. The
higher cost of production per quintal indicates poor performance o f
the Maroli co-operative sugar factory as compared to the other co operative sugar factory.
B.
Variation in per quintal cost of production of sugar
The Table -4.10 (B) shows that co -efficient of variatio n
in the average per quintal cost of production of suga r, including
the cost of cane, was found to be 14.59, 15.23, 14.56, 15.49 and
15.45 in case of the Bardoli, Madhi, Gandevi, Mahuva and the
Maroli co-operative sugar factory, respectively.
Co-efficient of variance in average per quintal cost o f
production of sugar, excluding the cost of cane was 13.71, 16.65,
13.22, 19.01 and 10.18 in case of the Bardoli, Madhi, Gandevi,
Mahuva and the Maroli co-operative sugar factory, respectively.
82
Table-4.10 (B) : Co-efficient of variation in per quintal cost of
production of sugar ( 2008 -09 to 2012-13)
Sr.
No.
CV % per quintal cost
of production (`)
Name of factory
Including
cost of cane
Excluding
cost of cane
1.
Bardoli co-operative sugar factory
14.59
13.71
2.
Madhi co -operative sugar factory
15.23
16.65
3.
Gandevi co-operative sugar factory
14.56
13.22
4.
Mahuva co-operative sugar factory
15.49
19.01
5.
Maroli co-operative sugar factory
15.45
10.18
The co-efficient of variation of cost of sugar productio n
per quintal excluding cane cost was low in case of the Maroli co operative sugar factory. It is low because of continuous poor
performance
of
Maroli
sugar
factory.
There
is
no
more
improvement in pe rformance and production process of Maroli
sugar factory. In case of the other co -operative sugar factory also
the co-efficient of variance was high. This was a result of both, the
effects of the 'Sugar cycle' as well as a general rise in prices of all
the commodities during the study period.
Similar result was found by Lakshmikantha m (1979) for
the state of Andhra Pradesh.
4.3.3.2
Per quintal cost of production of sugar during whole
period
The Table -4.11 (A) presents the performance of the
selected sugar factories in respect of the per quintal cost o f
production of sugar during the period from 2001 -02 to 2012-13.
83
(A)
Average per quintal cost of production of sugar
The Table-4.11 (A) shows the performance of selected
co-operative sugar factories in terms of cost of sugar productio n
over the long-run period also, i.e. during 2001 -02 to 2012-13, the
performance of the Gandevi co -operative sugar factory was found
to be the best.
The average per quintal cost of production of sugar,
including the cost of cane, was ` 2133.10, 2134.18, 2135.52,
2111.44 and ` 2366.86 in case of the Bardoli, Madhi, Gandevi,
Mahuva and the Maroli co -operative sugar factories, respectively.
This indicates poor performance of the Maroli co -operative sugar
factory in co mparison with the other co -operative sugar factory.
The Maroli sugar factory paid less cane price as co mpared wit h
other factories yet the cost of sugar production was high during the
study period. There was no much difference between the average
per quintal cost of production of sugar, including the cost of cane.
Table-4.11 (A) : Average cost per quintal of production of
sugar during whole period (2001 -02 to 2012-13)
Sr.
No.
Name of factory
Per quintal cost of
production (`)
Including
cost of cane
Excluding
cost of cane
1.
Bardoli co-operative sugar factory
2133.10
334.05
2.
Madhi co -operative sugar factory
2134.18
423.83
3.
Gandevi co-operative sugar factory
2135.52
333.47
4.
Mahuva co-operative sugar factory
2111.44
443.40
5.
Maroli co-operative sugar factory
2366.86
683.19
84
Average per quintal cost of production of sugar,
excluding the cost of cane was `334.05, `423.83, `333.47, `443.40
and `683.19 in case of the Bardoli, Madhi, Gandevi, Mahuva and
the Maroli co -operative sugar factories, respectively. In case of the
Maroli co-operative sugar factory, the cost was higher than the
other co-operative sugar factories.
B.
Variation in per quintal cost of production of sugar
The
Table -4.7
(B)
indicates
that
co-efficient
of
variation in the per quintal cost of production of sugar, including
the cane price, in case of the Bardoli, Madhi, Gandevi, Mahuva
and the Maroli co-operative sugar factories was 38.08, 37.70,
38.07, 37.41 and 36.32, respectively. The variation occurred
mainly due to the cane price paid by sugar factories. In case o f
excluding cane cost co-efficient of variation was 14.51, 17.47,
14.51, 17.93 and 39.24, respectively. The co -efficient of variatio n
in case the Maroli factory was high which indicated more
fluctuation in the cost of sugar production excluding c ane cost.
Table-4.11 (B):Co-efficient of variation in per quintal cost of
production (2001-02 to 2012-13)
Sr.
No.
Name of factory
CV % per quintal cost
of production (`)
Including
cost of cane
Excluding
cost of cane
1.
Bardoli co-operative sugar factory
38.08
14.51
2.
Madhi co -operative sugar factory
37.70
17.47
3.
Gandevi co-operative sugar factory
38.07
14.51
4.
Mahuva co-operative sugar factory
37.41
17.93
5.
Maroli co-operative sugar factory
36.32
39.24
85
Fig 6 : Average per quintal cost of production
of sugar including cost of cane
3500.00
2973.30
2954.92
2976.68
3000.00
2500.00
2133.10
2134.18
2135.52
3064.84
2918.50
2366.86
2111.44
2000.00
1500.00
1000.00
500.00
0.00
Bardoli coMadhi coGandevi coMahuva coMaroli cooperative sugar operative sugar operative sugar operative sugar operative sugar
factory
factory
factory
factory
factory
Per quintal cost of production (Rs.) Including cost of cane during 2001-02 to 2012-13
Per quintal cost of production (Rs.) Including cost of cane during 2008-09 to 2012-13
Fig 7 : Average per quintal cost of production
of sugar Excluding cost of cane
683.19
700.00
600.00
500.00
400.00
443.40
423.83 457.02
334.05364.93
658.40
499.38
333.47 344.31
300.00
200.00
100.00
0.00
Bardoli coMadhi coGandevi coMahuva coMaroli cooperative sugar operative sugar operative sugar operative sugar operative sugar
factory
factory
factory
factory
factory
Per quintal cost of production (Rs.) Excluding cost of cane during 2001-02 to 2012-13
Per quintal cost of production (Rs.) Excluding cost of cane during 2008-09 to 2012-13
To sum up, it was noted that the average per quintal cost o f
production of sugar was high in case of the Maroli co -operative
sugar factory in both the periods. The relative position of factories
under study in respect of both the categories of cost have bee n
presented in figure 6 and 7.
4.3.4
Cane price paid to the farmers
The cane price paid by a co -operative sugar factory is
the ultimate indicator of its performance from the farmer view
point. It is net result of the working results, management and
ultimately financial position of a co -operative sugar factory.
The co-operative sugar factories declare to pay a 'final
cane price' to the growers, after taking into all production cost and
inco me received fro m the sale of sugar.
There is a practice of making certain deducti ons fro m
final cane price declared by the factory for various reasons. Thus,
the cane price paid to the cane growers equals 'final cane price '
minus deductions. Higher deduction results in less cane price
actually received by the cane growers.
4.3.4.1
Cane price paid during recent period
The Table-4.12 (A) shows the performance exhibited by
the selected sugar factories in respect of the cane price paid to the
farmers during the period from 2008 -09 to 2012-13.
(A)
Average cane price paid to the farmers
The Table -4.12(A) indicated the average cane price paid
by the selected co -operative sugar factories during the period fro m
2008-09 to 2012-13.
86
The average cane price paid by the Gandevi co operative sugar factory was highest ( `2920.40 per tonne) tha n
other co-operative
sugar
factories.
Nevertheless,
an average
difference of about `113.20 per tones with second best price paid
by Bardoli sugar factory (`2807.20) proves the superior positio n
of the Gandevi co-operative sugar factory than the other co operative sugar factories. The average cane price paid by Madhi,
Mahuva and Maroli co -operative sugar factories was `2617.80,
`2637.00 and `2359.24 respectively. The lowest cane price was
paid by Maroli sugar factory to the farmers.
Table-4.12 (A) : Average cane price paid to farmers per tonne
of sugarcane during recent period (2008 -09 to 2012-13)
Sr.
No.
Name of factory
Average cane price
paid (`)
1.
Bardoli co-operative sugar factory
2807.20
2.
Madhi co-operative sugar factory
2617.80
3.
Gandevi co-operative sugar factory
2920.40
4.
Mahuva co-operative sugar factory
2637.00
5.
Maroli co-operative sugar factory
2359.24
B.
Variation in cane price paid to the farmers
The co-efficient of variation as shown in Table -4.12 (B)
in case of the Bardoli, Madhi, Gandevi, Mahuva and the Maroli co operative sugar factories were 16.38, 14.61, 17.20, 13.35 and
18.68, respectively. Thus, such variations were denotes the change
in cane price paid by the co -operative sugar factories every year.
87
Table-4.12 (B) : Co-efficient of variation in cane price paid to
farmers (2008 -09 to 2012-13)
Sr.
No.
CV % cane
price paid
Name of factory
1.
Bardoli co-operative sugar factory
16.38
2.
Madhi co-operative sugar factory
14.61
3.
Gandevi co-operative sugar factory
17.20
4.
Mahuva co-operative sugar factory
13.35
5.
Maroli co-operative sugar factory
18.68
4.3.4.2
Cane price paid during the whole period
The Table-4.13 (A) shows the performance exhibited by
the selected co -operative sugar factories in respect of the cane
price paid to the farmers during the period fro m 2001 -02-2012-13.
(A)
Average cane price paid to the farmers
The Table -4.13 (A) reveals tha t cane price paid by the
selected co-operative sugar factories during the whole study period
(2001-02 to 2012-13).
The average cane price paid by the Gandevi co operative sugar factory was highest than other co -operative suga r
factories. The cane p rice paid to farmers by Bardoli, Madhi,
Gandevi, Mahuva and Maroli were `1941.33, `1806.33, `2008.50,
`1842.33
and
`1650.63
respectively.
Here
also
an average
differences of about `67 per tonne than next best price paid by
Bardoli sugar prove the superior position of the Gandevi co operative sugar factory over other co -operative sugar factories.
88
Table-4.13 (A): Average cane price paid to farmers per tonne of
sugarcane during whole period (2001 -02 to 2012-13)
Sr.
No.
Name of factory
Average cane price
paid (`)
1.
Bardoli co-operative sugar factory
1941.33
2.
Madhi co-operative sugar factory
1806.33
3.
Gandevi co-operative sugar factory
2008.50
4.
Mahuva co-operative sugar factory
1842.33
5.
Maroli co-operative sugar factory
1650.63
Same kind of result was found in both the period. The Maroli sugar
factory paid lowest price as compared to other co -operative sugar
factories indicate the poor performance of the Maroli suga r
factory.
(B)
Variation in the cane price paid to the farmers
The Table -4.13 (B) shows that the co -efficient o f
variation in cane price paid by the Bardoli, Madhi, Gandevi,
Mahuva and the Maroli co -operative sugar factories was 43.68,
43.64, 44.50, 41.57 and 46.50, respectively. The variations
observed were high. It must be men tioned that the co -efficient o f
variation were high due to rise in prices and year to year ups and
downs. It is difficult to award superior or inferior status to any one
of the factories as far as the variations in cane price are concerned.
89
Fig 8 : Average cane price paid to farmers by
selected sugar factories (per tonnes)
3000.00
2920.40
2807.20
2637.00
2617.80
2359.24
2500.00
2000.00
1941.33
1806.33
2008.50
1842.33
1650.63
1500.00
1000.00
500.00
0.00
Bardoli coMadhi coGandevi coMahuva coMaroli cooperative sugar operative sugar operative sugar operative sugar operative sugar
Average cane price paid to farmers by selected sugar factories ( per tonnes ) - 2001-02 to
2012-13
Average cane price paid to farmers by selected sugar factories ( per tonnes ) - 2008-09 to
2012-13
Table-4.13 (B) : Co-efficient of variation in cane price paid to
farmers (2001 -02 to 2012-13)
Sr.
No.
Name of factory
CV % cane price
paid (`)
1.
Bardoli co-operative sugar factory
43.68
2.
Madhi co-operative sugar factory
43.64
3.
Gandevi co-operative sugar factory
44.50
4.
Mahuva co-operative sugar factory
41.57
5.
Maroli co-operative sugar factory
46.50
To sum up, it was noted that the average cane price paid
by the Gandevi co-operative sugar factory was higher than the
Maroli co-operative sugar factory during both the time periods of
study. This is evident fro m figure 8 which shows the average cane
prices during both the study periods. It may be noted that there
was an increase in average cane prices paid by all the selected co operative sugar factories during recent years.
Thus, the performance of the Gandevi co -operative
sugar factory was superior to other selected co -operative sugar
factories in respect of capacity utilization, sugar recovery, cost o f
production of sugar and cane price paid to the farmers. A study o f
average performance as well as variations in performance, over the
long run as well as short run indicated that Gandevi sugar factory
was in better position.
4.4
Determinants of performance of the selected co -operative
sugar factories
A study of growth and performance of the selected sugar
factories over a short -run as well as a long run period have been
90
discussed in the earlier section. The in depth analysis of various
para meters of the selected factories over a period of five years
from 2008-09 to 2012-13. Using these data, an attempt has been
made here to find out the reasons behind the good or poor
performance exhibited by the selected co -operative sugar factories.
The
data
collected
regarding
the
same
parameters
of
performance have been considered a nd analysed thoroughly to
determine their causal factors. The analysis in respect of the first
three
aspects
of
performance
viz.,
the
percentage
capacity
utilization, percentage sugar recovery and per quintal cost o f
production of sugar has been made throu gh the simple tabular
method. However, the functional relationship between the cane
price paid to the farmers and certain independent variables have
been determined through multiple regression analysis.
4.4.1 Percentage capacity utilization
4.4.1.1
Percentage capacity utilization-I
The percentage capacity utilization -I of a sugar factory
indicates performance of the factory against an optimum expected
cane crush. Assuming optimum crushing season of 160 days, the
optimum crush for a sugar factory equals its installed crushin g
capacity (TCD) multiplied by 160.
The Table -4.14 shows the performance of the selected co operative sugar factories in respect of capacity utilization -I during
the period from 2008 -09 to 2012-13.
The Table -4.14 reveals that percentage capacity utilization -I
91
of
the
Bardoli,
Madhi,
Gandevi,
Mahuva
and
the
Maroli
co-operative sugar factories was 111.85, 102.54, 131.92, 104.84
and 80.96 per cent, respectively. The Gandevi sugar factory
received the higher percentage o f cane from the operational area
which was 96 percentage of optimum cane crushed and the Maroli
sugar factory received lowest cane from the operational area was
52.50 percentage of optimum cane crushed. Moreover, the Maroli
co-operative sugar factory faile d to achieve full utilization o f
capacity, even after bringing as high as 28.46 per cent the cane
required for optimum crush fro m outside of the operational area.
The table further depicts that the Maroli co -operative sugar factory
procured as high as 35.15 per cent of the total cane crushed by it
from outside its operational area. The relative position of factories
under study in respect of sugarcane availability have bee n
presented in Fig. -9.
The excessive dependence on areas of outside the operation for
cane supply has proved to be detrimental to the health of the
factory. The availability of cane for crushing is determined by two
factors viz., area under sugarcane available for crushing and the
yield of sugarcane.
These results are in conformity with th e earlier results
reported by the Mane (1998) for the state of Maharashtra.
92
1800000
1600000
Fig-9 : Average Sugarcane availability during
1789610
2008-09 to 2012-13
1532750
Total cane
crushed
(tonnes)
1400000
1200000
1148532
1005000
1055437
1000000
768000
800000
587138
506987
600000
400000
200000
287437
256860
143352
Cane received
from
operational
area (tonnes)
323831
Cane received
210000
113831
from outside
80151
0
Bardoli coMadhi coGandevi co- Mahuva coMaroli cooperative
operative
operative
operative
operative
sugar factory sugar factory sugar factory sugar factory sugar factory
operational
area (tonnes)
Table 4.14
:
Sugarcane availability and average percentage
capacity utilization-I during recent period (2008 -09 to 2012-13)
Sr.
No.
Part iculars
1
Per centage
capacit y
utilization-I
Cr ushing capacit y
(T CD)
Optimu m exp ect ed
cr ushed (t onnes )
T otal cane cr ushed
(tonnes)
(i)P er centa ge t o
opt imu m
(ii)P er centa ge t o
total
Cane r eceived fr om
op er ationa l
ar ea(tonnes)
(i)P er centa ge t o
opt imu m
(ii)P er centa ge t o
total
Cane r eceived fr om
outs ide op er at ional
ar ea (tonnes)
(i)P er centa ge t o
opt imu m
(ii)P er centa ge t o
total
2
3
4
5
6
Bardo li
cooperat iv e
s ug ar
fact ory
111.85
Madhi
cooperat iv e
s ug ar
fact ory
102.54
Gandev i
cooperat iv e
s ug ar
fact ory
131.92
Mahuv a
cooperat iv e
s ug ar
fact ory
104.84
Maro li
cooperat iv e
s ug ar
fact ory
80.96
10000
7000
5000
3500
2500
1600000
1120000
800000
560000
400000
1789610
1148532
1055437
587138
323831
111.85
102.54
131.92
104.84
80.96
100
100
100
100
100
1532750
1005000
768000
506987
210000
95.8
89.73
96.00
90.53
52.5
85.65
87.5
72.77
86.35
64.85
256860
143352
287437
80151
113831
16.05
12.81
35.93
14.31
28.46
14.35
12.5
27.23
13.65
35.15
Cane price paid by sugar factories, distance of sugarcane field
from
factory,
productivity
of
sugarcane,
etc.
are
the
factors
responsible for sugarcane availability.
5.2.1.2
Percentage capacity utilization -II
Percentage capacity utilization -II is calculated by the following
formula :
93
Total cane crushed in a season
% capacity utilization =
Actual days x
in the season
x 100
installed crushing
capacity
It is clear from the formula that capacity utilization -II
measures the efficiency with which the actual days in crushing season
are utilized by a sugar factory. Stoppages in crushing result into loss
of time and reduce percentage capacit y utilization-II.
Data pertaining to average capacity utilization -II and
various reasons behind the stoppages in crushing have been presented
in Table-4.15.
The Table -4.15 shows that average percentage capacit y
utilization-II of the Bardoli, Madhi, Gande vi, Mahuva and the Maroli
co-operative sugar factories were 97.37, 99.57, 117.01, 98.45 and
84.33 per cent, respectively during the study period.
94
Table-4.15 : Factors influencing the average percentage capacity
utilization-II during 2008 -09 to 2012-13
Sr.
No.
Part icular
1
Aver a ge
p er centa ge
capacit y
utilization-I I
Stopage hour s
du e t o
(i) Cane
shor tage
(ii)
Mecha nical
and electr ica l
fault
(ii) N on
availabilit y of
cane du e to
r ain
(iv) G ener a l
clea ning
( v)Pr ocess ing
and ot her s
T otal
T otal
Cr ushing t ime
( hour s)
Per centage of
time lost
2
Bardo li
cooperat iv e
s ug ar
fact ory
97.37
Madhi
cooperat iv e
s ug ar
fact ory
99.57
Gandev i
cooperat iv e
s ug ar
fact ory
117.01
Mahuv a
cooperat iv e
s ug ar
fact ory
98.45
Maro li co operat iv e
s ug ar
fact ory
185.88
(4.21)
108.06
(2.45)
115.81
(2.87)
104.64
(2.59)
9.5
(0.21)
28.44
(0.63)
122.67
(3.00)
134.66
(3.29)
398.18
(10.80)
142.28
(3.86)
0
0
17.08
(0.38)
0
79.77
(2.17)
129
(2.92)
53.34
(1.21)
476.28
4411.2
129.94
(3.22)
99.65
(2.47)
450.04
4036.8
105.6
(2.33)
40.98
(0.90)
201.6
4531.2
108.05
(2.64)
83.82
(2.05)
449.2
4089.6
78.31
(2.12)
74.51
(2.02)
773.05
3686.4
10.80
11.15
4.45
10.98
20.98
84.33
(Figures in bracket indicate the percentage loses of time).
An account of stoppages in crushing in case of the selected factories
during the study period has been provided in Table -4.15. The table
clearly shows that percentage of crushing time lost due to stoppages in
case of the Bardoli, Madhi, Gandevi, Mahuva and the Maroli cooperative sugar factories was 10.80, 11.15, 4.45, 10.08 and 20.98,
respectively. The relative position about total crushing time and tota l
time loses have been presented in fig. -10.
95
Fig 10 : Total Crushing Time and Total Time
Losses of selected factories (hrs.)
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
4411.2
4036.8
4531.2
4089.6
3686.4
476.28
450.04
201.6
449.2
773.05
Bardoli co- Madhi co- Gandevi co- Mahuva co- Maroli cooperative
operative
operative
operative
operative
sugar factory sugar factory sugar factory sugar factory sugar factory
Time Loss
Total Crushing time
The break-up of total time loss during the study period
throws light of general efficiency of the factory during the crushin g
seasons under study. The available time was lost due to cane shortage
was observed to be 4.21, 2.87, 0.21, 3.00 and 10.80 per cent in case o f
the Bardoli, Madhi, Gandevi, Mahuva and the Maroli co -operative
sugar factories respectively. This concludes lack of proper plannin g
and
co-ordination
between
sugarcane
harvesting,
transport
and
crushing progra mme.
The
percentage
of stoppages
due
to
mechanical and
electrical fault in case of Bardoli, Madhi, Gandevi, Mahuva and
Maroli co-operative sugar factories was 2.45, 2.59, 0.63, 3.29 and 3.86
per cent of total time lost, respectively. This was suggesting that
better maintenance and care o f machinery was needed in this factory.
General cleaning work in the factory machinery resulted into the time
loss to the extent of 1.21, 3.22, 2.33, 2.64 and 2.12 per cent of the
respective co -operative sugar factories, respectively. General cleaning
is essential for proper working of the machinery during the season.
General cleaning also affects the efficient use of machineries and
other chemicals used in the production of sugar.
The efficiency o f
crushing is reflected by the percentage stoppages and it clearly
explains the good or bad performance of the factories under study in
respect of capacity utilization -II.
The total stoppage hours for Gandevi co -operative sugar
factory was lowest which reflected the better manage ment and
production process of sugar factory. The Maroli sugar factory lost
more time due to stoppage hours (about 21 per cent), which indicated
96
the poor performance of that sugar factory.
These results are in corroboration with the result earlier
found by Patel and Ashturkar (199 2) for the sugar industry in
Marathwada and Lakshmikantha m (1979) for the state of Andhra
Pradesh during the period fro m 1968 -69 to 1976-77.
4.2.2
Percentage sugar recovery
The percentage sugar recovery is influenced by two factors
viz., quantity of the sugarcane available for crushing and sugar lost in
bagasse, molasses, filter mud etc. during the process of production o f
sugar. Table-4.16 shows various reasons behind high or low sugar
recovery performance of the factories under study.
The table shows t hat average percentage sugar recovery o f
the Bardoli, Madhi, Gandevi, Mahuva and the Maroli sugar factory
was 10.85, 10.50, 11.44, 10.56 and 9.87, respectively during the
crushing season from 2008 -09 to 2012-13. The average percentage
sugar recovery of the Gandevi co-operative sugar factory was found to
be better than the other co -operative sugar factories. Due to the
sugarcane develop ment progra mme of the factory which emphasized
about use of adequate quantity of fertilizers and sugarcane varieties
yielding better sugar recovery percentage.
97
Table-4.16 : Factors influencing the average percentage sugar
recovery during 2008-09 to 2012-13
Sr.
No.
1
Part icular
Aver a ge
p er centa ge
sugar
Bardo li
cooperat iv e
Madhi cooperat iv e
s ug ar
Gandev i
cooperat iv e
Mahuv a
cooperat iv e
Maro li co operat iv e
s ug ar
s ug ar
fact ory
fact ory
s ug ar
fact ory
s ug ar
fact ory
fact ory
10.85
10.5
11.44
10.56
9.87
1.83
2.10
1.78
2.05
2.39
r ecover y
2
Aver a ge
sugar lost p er
cent ca ne
3
Per centage of
time lost du e
to st oppages
dur ing
cr ushing
10.8
11.15
4.45
10.98
20.98
4
Per centage of
cane r eceived
fr om outs ide
14.35
12.5
27.23
13.65
35.15
183.8
169
180.4
170.4
153.6
op er ationa l
ar ea
5
Aver a ge
gr oss s eason
( days )
The crushing season of the Maroli co -operative sugar
factory was generally very short. During the study period the average
gross season of this factory was about 153.6 days only. The crushing
was generally less due to non -availability of sufficient sugarca ne.
Therefore, a considerable portion of the cane was harvested earlier and
crushed. Due to this, the potential percentage of sugar in cane and
potential percentage sugar recovery remained unrealized.
98
The Table-4.16 showed that the average sugar lost per cent
cane during manufacturing was 1.83, 2.10, 1.78, 2.05 and 2.39 in case
of the Bardoli, Madhi, Gandevi, Mahuva and the Maroli co -operative
sugar factories, respectively. The loss of sugar generally bears a
positive relationship with the percentage of s ugar in cane and time lost
due to stoppages. This relationship is prominently clear especially in
case of the Maroli co-operative sugar factory. The table also shows
that a considerable portion of cane crushed by all five factories were
brought fro m outside its operational area. Such long distance transport
deteriorates the quality of cane resulting into lower recovery.
4.4.3
Per quintal cost of production of sugar
The per quintal cost of production of sugar is regarded as
an important indicator of the performance of a sugar factory. Higher
cost of production adversely affects the health of a factory. It results
into financial losses to the factory and lowers down ca ne prices
received by the sugarcane growers. The per quintal cost of productio n
of sugar is determined by the capacity utilization performance,
percentage sugar recovery and efficiency in the management of a
factory.
An analysis of cost of production of sugar in case of the
selected sugar factories has been presented in Table -4.17.
99
Table-4.17 : Average per quintal cost of production of
during
2008 -09 to 2012-13
Part iculars
sugar
(`/qtl.)
Bardo li cooperat iv e
s ug ar
fact ory
Madhi cooperat iv e
s ug ar
fact ory
Gandev i
cooperat iv e
s ug ar
fact ory
Mahuv a co operat iv e
s ug ar
fact ory
Maro li co operat iv e
s ug ar
fact ory
2557.26
(86.00)
2450.77
(82.94)
2581.16
(86.72)
2371.68
(81.26)
2359.24
(76.98)
Cane
pur chas ing tax
51.11
(1.72)
47.13
(1.59)
51.21
(1.72)
47.44
(1.63)
47.20
(1.54)
Pr odu ct ion cost
255.33
(8.59)
292.47
(9.90)
243.33
(8.17)
306.49
(10.50)
381.53
(12.45)
Salar y
35.34
(1.19)
30.57
(1.03)
32.99
(1.11)
52.12
(1.79)
23.13
(0.75)
I nt er est
40.45
(1.36)
71.62
(2.42)
35.51
(1.19)
45.23
(1.55)
164.81
(5.38)
Miscelle- neous
13.13
(0.44)
25.33
(0.86)
10.87
(0.37)
65.29
(2.23)
30.19
(0.98)
D epr eciation
20.68
(0.70)
37.03
(1.25)
21.61
(0.72)
30.25
(1.04)
58.74
(1.92)
2973.30
2954.92
2976.68
2918.50
3064.84
Cane cost
T otal
(Figures in the parenthesis are percentages to total)
The Table-4.17 shows that the average per quintal cost o f
production of sugar including the cost of cane was `2973.30,
`2954.92, `2976.68, `2918.50 and `3064.84 in case of the Bardoli,
Madhi, Gandevi, Mahuva and the Maroli co -operative sugar factories,
respectively during the study period.
The table also depicts that the average cost of cane during
this period in case of the Gandevi sugar factory was higher than other
selected sugar factories that means that the price of cane paid to the
farmers was higher in the Gandevi co -operative sugar factory. The
100
table also indicates that the percentage share of the cost of cane in the
total per quintal cost of production of sugar was higher in case of the
Gandevi co-operative sugar factory. The proportion of cost of cane in
the total cost of production of sugar was 86.00, 82.94, 86.72, 81.26
and 76.98 per cent in the Bardoli, Madhi, Gandevi, Mahuva and the
Maroli co-operative sugar factories, respectively. High share of cost
of cane in the total cost of production of sugar indicates successively
better performance of the Gandevi co -operative sugar factory. The
remaining ite ms of cost included in the table constitute the per quintal
cost of production of sugar, excluding the cost of cane. Although the
share of cost of cane was the main factor for the cost of sugar
production for all the co-operative sugar factories.
The table 4.17 also reveals that the expenditure on all these
items of cost was least in case of the Gandevi co -operative sugar
factory, except salary and depreciation than other co -operarive sugar
factories. The share of Maroli sugar for cane cost was lowest yet the
cost of production of sugar was highest because of poor performance
of Maroli sugar factory.
The absolute expenditure on these items of cost, in rupees,
are largely deter mined by the percentage sugar recovery and capacit y
utilization. As more units of production resulting from the same level
of variable and fixed inputs reduce the per unit cost of production.
However, the per cent share of each components of cost in the to ta l
per quintal cost of production of sugar indicates the efficiency or
otherwise of the concerned factory in respect of the particular
component of cost.
101
An analysis revealed that there was a large difference
between the factories under study, particula rly in respect to sugar
manufacturing
included
salaries
and
wages,
chemical
used,
expenditure on machinery repairs and maintenance, the manage ment
administrative expenses and interest paid and others.
The share of sugar manufacturing included sala ries and
wages,
che mical
used,
expenditure
on
machinery
repairs
and
maintenance etc. expenses in the total cost of production of sugar was
12.28, 15.46, 11.46, 17.11 and 21.48 per cent in case of the Bardoli,
Madhi, Gandevi, Mahuva and the Maroli co -operative sugar factories,
respectively. This indicates relatively poor performance of the Maroli
co-operative sugar factory. Especially, in case of the Maroli co operative sugar factory the expenditure on this ite m of cost was
excessive due to long distance tra nsport of sugarcane from outside the
operational area. The picture in respect of the interest on credit,
production cost and depreciation revealed even more disastrous
situation present in the Maroli co -operative sugar factory. This clearly
indicates that the factory was poor in financial condition. The cost o f
che mical used was also high. The Maroli co -operative sugar factory
has
been
found
to
spend
large
amounts
for
managerial
and
administrative purposes. The analysis for costs indicated better
performance of the Gandevi co-operative sugar factory as co mpared to
the other co-operative sugar factories under study. Therefore, it is
suggested that attention needs to be given towards improvement in
performance of the Maroli co -operative sugar factory. This fin ding is
supported by Baviskar and Rao (1997).
102
4.5
INPUT
USE,
COSTS
STRUCTURE
AND
RETURN
ANALYSIS
The decision and choice of crops to be grown on a farm and the area to
be allocated under a crop depends to a large extent on the prices o f
output, productivit y level, technology available and the level and
prices of inputs used in their production. The knowledge of input use,
cost structure and returns fro m the cultivation of crops helps in
formulating the policies at macro and micro levels. Such knowledge is
more useful for crops taken mainly for the market viz. the cash crops,
spices crops, fruits, vegetables and other high value crops. The input
use, cost structure and profitability of sugarcane crop have bee n
studied in this chapter.
The section has been divided into two parts:
4.5.1
Pattern of input use in cultivation of sugarcane crop.
4.5.2
Cost structure and returns fro m sugarcane cultivation.
4.5.1
Pattern of Input Use in Cultivation of Sugarcane
Crop
Sugarcane is one of the major cash crop occupying a prominent place
in the econo my of cultivators. Therefore, cost of sugarcane cultivatio n
has para mount importance in determining the net inco me from it. The
details of per hectare co mponent wise costs for sugarcane cultivation
on different size of farms are studied and the results are furnished in
Table – 4.18
It could be inferred from the Table – 4.18 that per hectare total cost
was found the highest (`187214.98) on large farms and the lowest
(`179486.99) on small farms with an overall total cost of `181986.10.
103
Relatively more utilization of hired human labour, bullock labour,
tractor, manures and weedicide charges might have inflated the higher
total cost on large farms as co mpared to other farm size groups.
Among the different ite ms of cash expendi ture, the major cost o f
sugarcane cultivation was hired human labour and planting material
with 13.89 and 13.02 per cent of the total cost, respectively because o f
sugarcane requires more number of labours for planting, weeding and
application of irrigatio n. Another high contributed cost item was
rental value of owned land ranked second with 14.79 per cent of the
total cost due to the cultivation of sugarcane in high value of land.
The other per hectare expenditure were interest on fixed capital (6.4 3
per cent), managerial costs (9.68 per cent), interest on working capita l
(7.08 per cent), irrigation charges (6.33 per cent), manures and cakes
(2.35 per cent), fertilizers (8.20 per cent), tractor charges (5.31 per
cent), depreciation (0.44 per cent), miscellaneous (5.35 per cent),
weedicide (2.21 per cent) and bullock labour (1.66 per cent).
104
Table 4.18: Pattern of Input Use in Cultivation of Sugarcane Crop
(` /hectare)
Sr.
No.
1
Item
S mall
T otal hu ma n lab our
(a) Family
(b) H ir ed
2
Bu llock labour
3
T ractor char ges ( hr s)
4
5
pla nting mat er ia l
(tonnes)
Manur es
6
Chemica l f er t ilizer s
7
Ir r igat ion
8
Weedicide
9
I ns ecticide / P esticide
10
Miscella neous
11
D epr iciation
12
I nt er est on wor king
capital
I nt er est on fix ed cap ital
13
14
15
Renta l va lu e of owned
land
Manager ial cost
16
T otal
6654.66
(3.71)
24680.4
(13.75)
2891.5
(1.61)
9232.11
(5.14)
24050.5
(13.40)
3970.65
(2.21)
14806.98
(8.25)
11691.33
(6.51)
3500.89
(1.95)
358.15
(0.20)
9592.97
(5.34)
869.4
(0.48)
12677.55
(7.06)
10989.43
(6.12)
26204.43
(14.60)
17316.04
(9.65)
179486.99
(100.00)
Catego ry o f Farm
Medium
Larg e
4813.2
(2.63)
25492.8
(13.95)
2995.5
(1.64)
9804.33
(5.36)
23500.25
(12.86)
4492.97
(2.46)
15045.77
(8.23)
11518.89
(6.30)
4150.15
(2.27)
402.33
(0.22)
9812.6
(5.37)
783.32
(0.43)
12959.92
(7.09)
12091.65
(6.62)
27199.65
(14.88)
17715.5
(9.69)
182778.83
(100.00)
(Figur es in par ent hes es indicat e p er centa ge t o t otal).
4200.7
(2.24)
26480.4
(14.14)
3412.5
(1.82)
10576.91
(5.65)
23200.34
(12.39)
4639.11
(2.48)
14962.37
(7.99)
11086.26
(5.92)
5150.55
(2.75)
420.66
(0.22)
9941.87
(5.31)
654.84
(0.35)
13263.01
(7.08)
12834.35
(6.86)
28204.43
(15.07)
18186.68
(9.71)
187214.98
(100.00)
Average
5552.55
(3.05)
25280.21
(13.89)
3014.29
(1.66)
9666.77
(5.31)
23702.67
(13.02)
4278.89
(2.35)
14924.11
(8.20)
11528.71
(6.33)
4013.67
(2.21)
385.17
(0.21)
9733.32
(5.35)
802.07
(0.44)
12879.67
(7.08)
11708.65
(6.43)
26906.74
(14.79)
17608.61
(9.68)
181986.1
(100.00)
Sour ce: Field Sur vey.
105
4.5.2
Cost Structure and Returns from sugarcane Cultivation
4.5.2.1
Estimates of different costs
Estimates of different costs such as cost A, Cost B, Cost C 1 and Cost
C 2 are presented in Table - 4.19.
It could be inferred from the above table that overall per hectare Cost A
came
to
`131918.20.
The
highest
per
hectare
Cost-A
was
`136623.20 on large farms and lowest was `129311.90 on s mall farms.
The study also shows that Cost-B and Cost-C 1 accounted for about
93.71 and 96.76 per cent of the total (Cost -C 2 ). On an average, CostC 2 came to `181986.10 per hectare which was highest on large farms
(`187214.98 per hectare) and lowest on small farms ( `179486.99 per
hectare).
Table 4.19: Estimation of Different Cost
Category
of Farm
Different costs (` per hectare)
Cost-A
Cost-B
Cost-C 1
Cost-C 2
Small
129311.90
(72.04)
166505.76
(92.76)
173160.42
(96.48)
179486.99
(100.00)
Medium
133050.50
(72.79)
172341.80
(94.29)
177155.00
(96.92)
182778.83
(100.00)
Large
136623.20
(72.98)
177661.98
(94.90)
181862.68
(97.14)
187214.98
(100.00)
Overall
131918.20
(72.49)
170533.59
(93.71)
176086.14
(96.76)
181986.10
(100.00)
(Figure in parenthesis indicate percentages to Cost-C 2 )
Source: Field Survey.
106
Higher costs on large farms are associated with intensive use of hired
human labour and bullock labour as compared to medium and small
size farm group. No particular trend was observed in different cost
concepts on various categories of sugarcane cultivators.
4.5.2.2
Yield, price, gross income and net gains
Yield, farm harvest price and value of gross output fro m sugarcane
production on different farm size groups are presented in Table - 4.20.
It is revealed that the average yield of sugarcane was 84.91 tonnes per
hectare. It ranged from 83.45 tonnes on small farms to 87.00 tonnes on
large farms. Higher yield level on large farms may be due to optimu m
level of inputs utilized by the m along with timely weeding operations,
proper selection of varieties of sugarcane, which affect the output to a
greater extent, as co mpared to other farms. The variation in the yield
might be due to the different time of sowing, types of land and use of
hybrid variety.
The results in Table -4.20 indicate that per tonne average price
received by the respondent sugarcane growers was `3196.17. The
large size growers realized higher prices per tonnes ( `3297.76)
followed by medium (`3228.55) and on small ( `3133.13). Generally,
medium and large size farm growers were manage the proper time o f
sowing and harvesting so they achieved more price as compared to
small farmers.
The average gross returns per hectare on sugarcane farms amounted to
` 271386.79 and it varied fro m ` 288853.79 on large farms and `
261459.70 on small farms. The gross income was high on large farms
fallowed by medium and small farms. This might be due to harvesting
107
time of sugarcane by s mall farmers more earlier to manage next season
and to so me time for early harvesting they burn their produce or sell
to other sources like as khadsari or to other middle men.
Table 4.20: Yield Level, Farm Harvest Price and Gross Income per
hectare
Yield
(tonnes)
Harvest price
(` /tonnes)
Value of gross
output (`)
Small
83.45
3133.13
261459.70
Medium
85.77
3228.55
276912.73
Large
87.00
3297.76
288853.79
Overall
84.91
3196.17
271386.79
Category of
Farm
Source: Field Survey.
4.5.2.3
Net gains over different costs per hectare
Net gains or profit is very important aspect for any crop,
for deciding that crop is re munerative or not and for future planning.
Details regarding net gains per hectare over different costs are
presented in Table 4.21.
108
Table 4.21: Net Gains over Different Costs per hectare
Net gains over different costs
Category of
Farm
Cost-A
Small
132147.80
Cost-B
94953.94
Cost-C 1
Cost-C 2
88299.28
81972.71
Medium
143862.23
104570.93
99757.73
94134.4
Large
152230.59
111191.81
106991.11
101638.81
Overall
140068.59
100833.20
95300.62
89400.69
Source: Field Survey.
A perusal of above Table - 4.21 shows that the per hectare net returns
over operational cost (Cost -A) was the highest (` 152230.59) on large
farms and the lowest ( `132147.80) on small farms with an average of
`140068.59 on sample farms. Overall net returns from sugarcane
farms on the basis of Cost B, Cost C 1 and Cost C 2 was `100833.20,
`95300.62 and `89400.69 per hectare, respectively. It is apparent fro m
the Table - 4.21 that per hectare net returns on sugarcane farms over
Cost C 2 ranged fro m `81972.71 on small farms to `101638.81 on large
farms with an average of `89400.60. Net gains over different costs
increased as the size of farms increases.
4.5.2.4
Farm business income, family labour income and
net profit
It is necessary to estimate the farm business inco me (FBI) for any
business or crop grown. Particularly in agricultural sector the
estimation of fa mily labour inco me is very important, because in
agricultural business there are more involvement of fa mily me mbers
109
than other business. It reflects the econo mic viability of the business
or cultivation of crop over different income aspects.
Table 4.22: Farm Business Income, Family Labour Income and Net
Profit
(` /hectare)
Category of
Farm
Farm business
income
Family labour
income
Net profit
Small
Medium
Large
Overall
132147.80
143862.23
152230.59
140068.59
94953.94
104570.93
111191.81
100833.20
81972.71
94134.40
101638.81
89400.69
Source: Field Survey.
The overall per hectare farm business income, fa mily labour income
and net profit showed in Table - 4.22 were `140068.59, `100833.20,
`89400.69 respectively. The data further revealed that the overall net
profit per hectare (over Cost-C 2 ) was `89400.69
4.5.2.5
Input-Output Ratio
The input - output ratio reflects the criteria for econo mic viability of
the crop based on return per rupee invested. The input - output ratios
were worked out on the basis of different cost concepts and the sa me
are presented in Table - 4.23.
The overall input output ratio was 1:1.49 on the basis of cost - C 2 . It
indicates that an investment worth of `1 on all the inputs used in the
cultivation of sugarcane yielded an output worth of `1.49. The input
110
output ratio was the lowest ( 1:1.46) on s mall farms and the highest
(1:1.54) on large farms.
Further, it was observed that the input output ratio on the
basis of cost - A i.e. paid out cost, was the highest ( 1:2.11) on large
farms followed by medium farms (1:2.08) and small farms ( 1:2.02).
There were no much difference observed because mostly sugarcane
was sold to co -operative sugar factories so, price variation is less.
Table 4.23: Input-Output Ratio
Category of Farm
Cost-A
Cost-B
Cost-C 1
Cost-C 2
Small
1:2.02
1:1.57
1:1.51
1:1.46
Medium
1:2.08
1:1.60
1:1.56
1:1.52
Large
1:2.11
1:1.62
1:1.59
1:1.54
Overall Farms
1:2.06
1:1.59
1:1.54
1:1.49
Source: Field Survey.
4.5.2.6
Costs per tonnes
It is the cost-price relationship (the cost-price ratio) that
generally
decides
the
economic
prosperity
and
the
degree
of
commercialization on these farms. Given the price, offered by the
market mechanis m to a unit of output, the farmers prosperity depend
upon his capacity to produce his output at a lesser cost than the market
price.
111
Table 4.24: Cost of Production per tonnes on the Basis of Different
Cost Concepts
Different costs (` per quintal)
Category of
Farm
Cost A
Cost B
Cost C 1
Cost C 2
1549.57
1995.28
2075.01
2150.83
(72.04)
(92.76)
(96.47)
(100.00)
Small
1551.25
2009.35
2065.47
2131.03
Medium
(72.79)
(94.29)
(96.92)
1570.38
2042.09
(72.98)
(94.94)
(97.14)
(100.00)
1553.62
2008.64
2073.80
2143.28
(72.49)
(93.72)
(96.75)
(100.00)
2090.38
(100.00)
2151.90
Large
Overall
Note: Figures in parentheses indicate the percentages to Cost -C 2
Source: Field Survey.
The estimated cost of production per tonnes of sugarcane is
given in Table - 4.24. The overall paid out cost (cost - A) per tonne
was `1553.62, which was 72.49 per cent of the overall total cost. The
overall cost- B ca me to `2008.64 per tonne (93.72 per cen t of overall
total cost). The overall total cost of production (cost - C 2 ) per tonne of
sugarcane was `2143.28. Cost of production per tonne was highest on
large farms (`215.90), followed by small farms ( `2150.83) and
medium farms (`2131.03).
112
Therefore,
it
can
be
concluded
that
the
sugarcane
cultivation was quite re munerative, but if the price of cane dropped by
co-operative sugar factories than it will be difficult to remunerative
cultivation, because there is no other marketing option for sugarcane
in South Gujarat.
4.6
Resources use efficiency in sugarcane production
The resource use efficiency is of paramount importance, as the y
provide readily information relating to probable effects of resource
use on yield of particular crop. While, discussing the results, the
group wise comparison is attempted in order to get an idea regarding
variations in the productivities of different resources in the production
of sugarcane.
It is noted fro m the Table 4.25, that for all the farms under
study, the regression coefficient for human labour (X 1 ), Tractor
hours(X 3 ) and manures(X 5 ) were significant at 1 per cent level o f
significance. Which means that one unit increase in that factors of
production will increase the yield by 0.832, 0.400 and 0.210 per cent,
respective ly. In case of irrigation(X 9 ), the regression coefficient was
significant at 5 per cent level which increased the production at 0.830
per cent. The use of nitrogen was negative and significant at 5 per cent
level of significance which indicates the use of one more unit o f
nitrogen fertilizer will minimize the yield by 0.310 per cent.
113
Table 4.25: Regression analysis of resource use in sugarcane crop
on sample farms
Sr.
no.
Particular
Small
N=109
Medium
N=93
Large
N=38
Overall
N=240
1
Human
(days)(X 1 )
labour
1.020*
(0.480)
0.890**
(0.110)
0.890*
(0.330)
0.832**
(0.260)
2
Bullock
(days)(X 2 )
labour
0.100ns
(0.980)
0.210ns
(0.120)
0.360ns
(0.290)
0.300ns
(0.200)
3
Tractor (hrs) (X 3 )
0.350ns
(0.340)
0.410*
(0.200)
0.560**
(0.130)
0.400**
(0.130)
4
Planting
(qt) (X 4 )
0.250ns
(0.140)
0.120ns
(0.190)
0.090ns
(0.160)
0.091ns
(1.100)
5
Manure(qt) (X 5 )
0.150*
(0.070)
0.210**
(0.080)
0.223ns
(0.150)
0.210**
(0.100)
-0.390*
(0.170)
-0.340**
(0.140)
-0.320*
(0.130)
-0.310**
(0.110)
6
Material
N(kg) (X 6 )
7
P(kg) (X 7 )
-0.290ns
(1.360)
-0.250ns
(0.320)
-0.220ns
(0.310)
-0.280ns
(0.800)
8
K(kg) (X 8 )
0.180ns
(1.010)
0.140ns
(0.140)
0.110ns
(0.110)
0.120ns
(0.900)
9
Irrigation
(`/ha) (X 9 )
1.230**
(0.420)
1.050**
(0.220)
0.800**
(0.180)
0.830*
(0.190)
10
R2
0.790
0.810
0.840
0.810
11
Degrees of
Freedom
99
83
28
230
Not e: **, * indicat es t he levels of s ignif icance at 1and 5 p er cent r esp ect ively
N.S. = Non signif ica nce
(Figur es
in
t he
par ent hes is
ar e
t he
sta ndar d
er r or s
of
r esp ect ive
r egr ess ion
coeff icients)
114
The regression coefficient in case of small farms for huma n
labour(X 1 ), manure (X 5 ) and irrigation(X 9 ) were significant at 1 per
cent and 5percent level of significance, respectively. The positive and
significant coefficient indicated that one unit increase in the huma n
labour; manure and irrigation will increase the yield of sugarcane by
1.020 percent, 0.150 percent and 1.230 percent, respectively.
While
nitrogen(X 5 ) was negative and significant at 1 per cent level o f
significance which indicates the one unit increase in the use o f
nitrogen the yield will be minimize by 0.390 per cent.
For medium farmers the regression coefficient were positive and
significance for human labour (X 1 ), manures(X 5 ) and irrigation (X 9 ) at
1 per cent level of s ignificance. Which means that one unit increase in
that factors of production will increase the yield of sugarcane b y
0.890, 0.210 and 1.050 per cent, respectively. The regression
coefficient for tractor use was found significant at 5 per cent and
increases the yield by 0.410 per cent. In case of nitrogen fertilizer the
regression coefficient was negative and significant at 1 per cent leve l
of significance which indicates the use of one more unit of nitroge n
fertilizer will minimize the yield by 0.340per ce nt.
The regression coefficient in case of large farms for tractor hours
(X 3 ) and irrigation (X 9 ) were found significant at 1 per cent level o f
significance, respectively. The positive and significant coefficient
indicated that one unit increase in the tractor hours and irrigation will
increase the yield of sugarcane by 0.560 and 0.800 per cent,
respectively. In case of human labour the regression coefficient was
positively significant at 1 per cent level of significance, which
indicates that unit increase in human labour will increase the yield o f
115
sugarcane by 0.890 per cent. While nitrogen(X 5 ) was negative and
significant at 1 per cent level of significance which indicates the one
unit increase in the use of nitrogen the yield will be minimi zed by
0.320 per cent.
116
SUMMARY
AND
CONCLUSIONS
V. SUMMARY AND CONCLUSIONS
The sugar industry is pre-dominantly agro -based industry in
India, as well as in Gujarat. The sugar factories are located in rural
area
and
have
intrinsic
symbiotic
relationship
with
the
rural
development. Especially, the co -operative sugar factories possess a
great potential to act as instrument of socio -econo mic transformations
in the rural areas. The number of sugar factories, their scale o f
operation and net contribution to the national econo my has bee n
steadily rising during the post independence period in general and
after mid-sixties in particular. However, a large difference is found in
the performance
exhibited by individual sugar fact ories.
So me
factories have exhibited fast growth where as so me have failed to
exhibit their performance.
Such differences at the micro -level are evident not only in
India but also in the state of Gujarat. In general, Gujarat state and in
particular South Gujarat region of the state has considered to be one of
the leading pocket of the sugar industry of the country. Especially, the
South Gujarat holds a much superior position in respect of favourable
agro-climatic condition for sugarcane cultivation, availa bility of
infrastructural facilities and technology development of the sugar
industry. Nevertheless, some of the factories in the region are
underutilization and running in loses when many others are doing
well.
The poor performance by a co -operative sugar factory
marks the interests of agrarian community in particular and the
117
national econo my in general. To overco me this situation, a careful
analysis of performance of individual sugar factory has to be carried
out. It was therefore, felt necessary to take up the present research,
viz.; “An Economic efficiency of sugar co -operatives in South Gujarat
region of Gujarat”, with following objectives :
5.1
OBJECTIVES
The specific objectives of the study were as under :
6. To study the change in area, production and productivity o f
sugarcane in South Gujarat region.
7. To evaluate the performance of selected co -operative sugar in Sout h
Gujarat.
8. To find out the reasons for sickness of co -operative sugar factories
in South Gujarat.
9. To suggest the measures to improve the econo mic efficiency of the
co-operative sugar factories.
10.
To exa mine the resource productivity of various factors o f
production on cultivators field.
Gujarat is considered to be one of the leading states in
India in co-operative sugar factories and South Gujarat is recognized
as the most important centre of successful sugar co -operatives and
sugarcane production.
The objective was to study the various parameters o f
growth and performance of selected sugar factories, so there is a need
to find out the determinants of performance of the selected co -
118
operative sugar factories for suggesting appropriate measures o f
improvement in econo mic efficiency of these factories.
For the selection of sugar factories and other primary
information, data were collected from the records of Director of Sugar
Ahmadabad. All the factories in the region were grouped according to
the installed crushing capacity.
South Gujarat region consists of 17 sugar factories spread
over 7 districts of the region. All are under co -operative sector, among
them five sugar factories were selected for the study. The selection
was made on the basis of their crushing capacity . There is only one
sugar factory having installed crushing capacity of 10,000 tons / day
i.e., Bardoli Co-operative Sugar factory. Only, Madhi Sugar factory
having installed crushing capacity of 7000 tonnes/day. There are four
co-operative
sugar
factories
having
crushing
capacity
of
5000
tonnes/day, among the m Gandevi co -operative sugar factory was
selected rando mly for the study. There is only one sugar factory whic h
having crushing capacity of 3500 tonnes/day, i.e., Mahuva co operative sugar factory. The re are six co-operative sugar factories
having crushing capacity of 2500 tonnes/day, among the m Maroli co operative sugar factory was selected randomly for study purpose. The
required data, both at factory level and sugarcane growers level were
collected. The factory level data were collected fro m annual reports
and personal visits for the periods of 2001 -02 to 2012-13, while the
sugarcane cultivators level data were collected for the year 2013 -14 b y
personal interview with the help of pre tested schedule o f all 240
sugarcane growers from the jurisdiction of all the selected sugar
119
factories by using random sampling techniques. The data relating to
area, production and productivity for the state as well as district were
collected from the seasonal and crop re ports data published by the
Department of agriculture, Gujarat government.
To study the growth rates exhibited by the factories in
respect of total cane crushed, total sugar produced and total area under
sugarcane available for crushing, time series data fro m the years o f
2001-02 to 2012-13 were utilized. Linear and compound growth rates
in respect of the above factors were estimated by utilizing the time
series data.
To study the performance of the selected factories, two
time periods viz., a short run (Recent period) 2008-09 to 2012-13 and
a long run (whole period) 2001 -02 to 2012-13 were considered.
Average as well as variations in percentage capacity utilization,
percentage sugar recovery, per quintal cost of production of sugar and
the per ton cane price paid to farmers were studied to assess the
performance exhibited by the selected factories during the two
different time periods under study.
An in depth analysis of percentage capacity utilization,
percentage sugar recovery and per quintal cost of production of sugar
in the selected factories was done for the period 2008 -09 to 2012-13 to
analyze the reasons behind satisfactory or poor performance of the
factories.
5.2
MAJOR FINDINGS
The salient research results obtained are being summarized
and concluded in this chapter.
120
(1)
On an average fa mily size of the selected sugarcane
growers was 5.80. On an average land holding size was
3.20 hectare out of which more than two hectare land put
under sugarcane cultivation.
(2)
The gross cropped area was 972060 hectares in South
Gujarat of which field crops, fruit crops, flower crops and
vegetable crops contributed 833200, 130419, 5941 and
2500 hectare area, respectively.
(3)
The total production was 5686584 M.T. in South Gujarat o f
which field crops, fruit crops, flower crops and vegetable
crops contributed 2475000, 3100006, 66078 and 45500
M.T., respectively.
(4)
Production of sugarcane
in the
state increased at a
compound growth rate of 1.28 per cent per annum.
Production growth rate ha s been positive in all districts o f
South Gujarat region except Valsad district. Acreage under
sugarcane crop in the state increased by 1.55 per cent per
annum. In the districts of South Gujarat also recorded
positive growth except Valsad. Productivity of the crop
increased by 0.27 per cent per annum in the state.
Productivity growth has been deceased significantly only in
Valsad districts of South Gujarat region, while in other
districts of South Gujarat it has increased significantly.
(5)
The annual percentage linear and compound growth rate o f
Bardoli co-operative sugar factory in respect of total
sugarcane crushed, sugar produced and area under crushing
121
was found non-significant because Bardoli sugar pertaining
continuous good performance according to its installed
crushing capacity during study period.
(6)
The annual rates of compound growth in respect of tota l
cane crushed, total sugar produced and sugarcane area
available for crushing in for the Madhi co -operative sugar
factory were 1.92, 1.40 and 3.01 per cent, respectively. The
total sugarcane crushed and sugar produced was found
significant at 5 per cent level, where as the area available
for cane crushing was found significant at 1 per cent. The
result shows that the area of sugarcane increased and h ence
the cane crushed and sugar production was increased b y
Madhi co-operative sugar factory.
(7)
The continuous and steady growth was observed in case o f
Gandevi
co-operative
sugar
factory.
The
annually
compound growth rate in case of total cane crushing, su gar
produced and area available for cane crushing was 1.01,
1.15 and 1.10 per cent, respectively. All these para meters
were found significant growth at 5 per cent.
(8)
The annual co mpound growth rate of Mahuva co -operative
sugar factory with respect of total sugarcane crushed, sugar
produced and area available of cane for crushing were 0.10, -0.59 and 2.06 per cent, respectively. The sugarcane
area available for crushing was found significant at 1 per
cent level. Although the cane crushed and sugar produced
122
was not increased significantly because of poor productivit y
of sugarcane in the area of Mahuva sugar factory.
(9)
The annual percentage compound growth rate for these
para meters in case of Maroli co-operative sugar factory was
found significant at 5 per cent, level. This suggest that the
growth in case of cane crushed, sugar produced and
available for crushing is increased
for Maroli sugar
factory.
(10)
Average capac ity utilization-I was found highest in case o f
the Gandevi sugar factory (131.93 per cent) and lowest o f
the Maroli co-operative sugar factory (80.96 per cent )
during the recent period fro m 2008 -09 to 2012-13. Over the
long run (whole period) period i.e.
2001-02 to 2012-13,
was also found the same kind of trend. It was highest in
case of Gandevi sugar factory (126.91 per cent) and lowest
in Maroli sugar factory (74.19 per cent). The average
capacity utilization-I of all other selected sugar factories
was more than 100 per cent. In case of average capacit y
utilization-II also found highest in Gandevi sugar factory
during recent as well as whole period (117.01 and 112.79
per cent, respectively). It was lowest of the Maroli sugar
factory for both the periods ( 68.27 and 77.88 per cent). The
average capacity utilization -II of Bardoli, Madhi and
Mahuva sugar factories was almost around 100 per cent for
both the periods. The capacity utilization of 100 per cent is
generally considered to be optimum. So the performa nce o f
123
Maroli sugar factory was much below than the standard
norms and as compared to other sugar factories. The bette r
performance of Gandevi sugar factory in respect of capacit y
utilization imparts a better position than the other co operative sugar fact ories.
(11)
Average sugar recovery percentage during the period of
2008-09 to 2012-13 of the Gandevi, Bardoli,
Mahuva,
Madhi and Maroli co-operative sugar factories were 11.44,
10.85, 10.56, 10.50 and 9.87 per cent, respectively. Over
the whole period i.e. 2001-02 to 2012-13, the same
para meters were observed to be 11.50, 10.97, 10.77, 10.73
and 10.03 per cent,
respectively.
The
average
sugar
recovery percentage of the Gandevi co -operative sugar
factory was found to be higher than the other co -operative
sugar factories during both the time periods. Noticed that,
the average sugar recovery percentage of all the selected
co-operative sugar factory has declined during the recent
years.
(12)
During the period fro m 2008 -09 to 2012-13, the average per
quintal cost of the production of sugar, including the cost
of cane, was `2973.30, `2954.92, `2976.68, `2918.50 and
`3064.84 in case of the Bardoli, Madhi, Gandevi, Mahuva
and the Maroli co-operative sugar factory, respectively.
Over the whole period i.e. 2001 -02 to 2012-13, the same
was `2133.10, `2134.18, `2135.52, `2111.44 and `2366.86,
respectively. The high cost of production of sugar in case
124
of the Maroli co -operative sugar factory, indicated poor
performance of the factory in co mparison to the other co operative sugar factories.
(13)
During the period fro m 2008-09 to 2012-13 the average per
quintal cost of production of sugar, excluding the cost o f
cane, was lowest of Gandevi sugar factory ( `344.31) and
highest of Maroli sugar factory ( `658.40). Over the longrun period (2001-02 to 2012-13) the sa me trend was
observed. The higher cost of production per quintal of suga r
indicates the poor performance of Maroli sugar factory as
compared to other selected sugar factories.
(14)
The co-efficient of variation in the per quintal cost o f
production of sugar, including the cost of cane, were very
high in case of all the selected factories over the long -run
period. Such high variations resulted due to increase in
price of various materials, including sugarcane over the
period. For the period from 2001 -02 to 2012-13 the coefficient of variation in respect of the Bardoli, Madhi,
Mahuva, Gandevi and Maroli co -operative sugar factory
were 14.59, 15.23, 14.56, 15.49 a nd 15.45 per cent,
respectively.
(15)
During the period from 2008 -09 to 2012-13, the average
cane price paid by the Bardoli, Madhi, Gandevi, Mahuva
and the Maroli co-operative sugar factory was `2807.20,
`2617.80, `2920.40, `2637.00 and `2359.24, respectively.
The same was `1941.33, `1806.33, `2008.50, `1842.33 and
125
`1650.33, respectively, during the period from 2001 -02 to
2012-13. It is evident that cane price paid was higher in the
recent years and it was highest in case of Gandevi sugar
factory followed by Bardoli sugar factory.
(16)
The co-efficient of variation in the cane price paid by all
the selected factories under study was reasonably high
during whole period (2001 -02 to 2012-13). The co-efficient
variation for the same during recent periods (2008 -09 to
2012-13) was quite low as co mpared to whole period. This
was primarily due to increase in the cane prices over the
years.
(17)
An analysis of the short-run (recent period) period showed
that, the Gandevi sugar factory received the highest
percentage
of
cane
fro m
operational
area
i.e,
96.00
percentage of optimum c ane crushed. The Maroli sugar
factory received the lowest percentage (52.5 per cent) o f
cane from operational area.
Bardoli, Mahuva and Madhi
sugar factory received 95.80, 90.53 and 89.73 percentage o f
sugarcane from the operational area required for opt imu m
crushing. The cane availability was high in case of Gandevi
and Bardoli sugar factories due to sufficient area under
sugarcane and better yield in co mparison with the Maroli
co-operative sugar factory. Even though 96 per cent cane
received fro m operat ional area
by Gandevi sugar,
it
received 35.93 per cent from outside of operational area fo r
crushing more than optimum level, indicated the bette r
126
performance and management of that sugar factory. Maroli
sugar factory failed to achieve full utilization of capacity,
even 35.15 per cent sugarcane bringing fro m out o f
jurisdiction.
(18)
During 2008-09 to 2012-13, the percentage of crushing time
lost due to stoppages was 4.45, 10.80, 10.98, 11.15 and
20.98 per cent in case of the Gandevi, Bardoli, Mahuva,
Madhi
and
the
Maroli
co-operative
sugar
factory,
respectively. The time lost due to cane shortage was 0.21,
2.87, 3.00, 4.21 and 10.80 per cent by Gandevi, Madhi,
Mahuva, Bardoli and Maroli sugar factories. The percentage
of crushing time lost due to stoppag e was lowest in case o f
Gandevi sugar factory indicated the better performance and
manage ment of the Gandevi sugar factory.
(19)
During the recent period the average length of the crushing
seasons during 2008 -09 to 2012-13 was 183.8, 169, 180.40,
170.40 and 153.60 gross days in case of the Bardoli, Madhi,
Gandevi,
Mahuva
and
the
Maroli
co -operative
sugar
factories, respectively.
(20)
An analysis of average per quintal costs of production o f
sugar
during
the
short-run
period
showed
that
the
percentage shares of cost on ite ms other than the cost o f
cane were high in the Maroli co -operative sugar factory.
Manufacturing cost including salaries and wages as well as
machinery repairs and maintenance, chemical used charges
accounted for 13.28, 14.00, 17.06, 18.74 and 23.02 per cent
127
of the total cost of production in case of theGandevi,
Bardoli, Madhi, Mahuva and Maroli co -operative sugar
factories, respectively. This shows the better manage ment
of the Bardoli and Gandevi co -operative sugar factories,
while the poor manage ment of the Maroli sugar factory.
(21)
The average total cost of cultivation of sugarcane was
`181986.10. It was the highest i.e. `187214.98 on large
farms followed by `182778.83 on medium farms and
`179486.99 on small farms. Further the break -up of tota l
cost on sample farms indicated that per hectare expenditure
on rental value of owned land was ranked first with 14.79
per cent of the total cost followed by hired human labour
(13.89 per cent), planting material (13.02 per cent),
che mical fertilizers (8.20 per cent), interest on working
capital (7.08 per cent), interest on fixed capital (6.43 per
cent) and irrigation charges (6.33 per cent). Thus, these
major ite ms contributed 90 per cent of total cost. The
expenditure on plant protection chemicals was very low
because there is no much attack of disease and pest in
sugarcane in study area.
(22)
Overall per hectare cost-A, cost-B, cost-C1 and cost C2 o f
sugarcane cultivation ca me to `131918.20, `170533.59,
`176086.14 and `181986.10, respectively. Higher costs o n
big farms are associated with intensive use of hired huma n
labour,
bullock
labour,
tractor
charges
and
manures
charges.
128
(23)
The average overall yield of sugarcane was 84.91 tonnes
per hectare. It was highest (87.00 tonnes) on large size
farms and lowest (83.45 tonnes) on small size farms.
(24)
The average overall farm harvest price received by the
sugarcane growers was `3196.17 per tonne. It varied fro m
`3133.13 on s mall farms to `3297.17 on large farms. The
gross income per hectare was highest i.e . `288853.79 o n
large farms and lowest i.e. `261459.70 on small farms wit h
an average of `271386.79 on sample farms.
(25)
On an average net return per hectare from sugarcane farms
on the basis of Cost A, B, C 1 and Cost C 2 was `140068.59,
`100833.20, `95300.62 and `89400.69, respectively.
(26)
The average per hectare farm business income and family
labour
inco me
were
`140068.59,
and
`100833.20,
respectively on the sa mple farms. The average net profit per
hectare over Cost -C 2 was `89400.69 and it increased wit h
the increase in size of farms, except small size farms.
(27)
The overall input-output ratio was 1:1.49 on the basis of
cost- C 2 . It was the highest (1: 1.54) on large farms,
followed by medium farms (1:1.52), and s mall farms
(1:1.46). Thus, it shows the increasing trend with a n
increase in the farm size.
(28)
The average cost of production per tonne of sugarcane was
about `2143.28 which was lower than the market price o f
sugarcane ranging fro m `3000 to `3400 per quintal.
129
Therefore,
it
can
be
concluded
that
the
sugarcane
cultivation was quite remunerative even if the lowest
market price is considered. Cost of production per tonne
varied from ` 2131.03 on medium farms to `2151.90 o n
large farms.
(29)
It is noted from the study o f all the farms of sugarcane
growers under study, the regression coefficient for human
labour, tractor hours, and manures were significant at 1 pe r
cent level of significance. Which means that one unit
increased in that factors of production will increased the
yield by 0.832, 0.400 and 0.210 per cent, respectively. In
case of irrigation, the regression coefficient was significant
at 5 per cent level which increased the production at 0.830
per cent. The use of nitrogen was negative and significant
at 5 per cent level of significance which indicates the use o f
one more unit of nitrogen fertilizer will decrease the yield
by 0.310 per cent. The result indicated that good land
preparation, proper planting, weeding, adequate irrigatio n
and
recommended
dose
of
nitrogenous
fertilizer
increase the sugarcane production.
130
will
5.3
SPECIFIC CONCLUSIONS
The above mentioned finding of the study enabled to draw
the following specific conclusions.
1. The capacity utilization performance of the Gandevi co-operative
sugar factory was good because of abundant cane supply and
efficient crushing with minimum stoppages.
2. Average sugar recovery percentage was higher in case of the
Gandevi co-operative sugar factory as a result of good quality o f
cane and efficient production techniques. A much prolonged
averages crushing season in case of the Gandevi co -operative sugar
factory and very short average crushing season in case of the
Maroli co-operative sugar factory affected their sugar recovery
performance adverse ly.
3. The average per quintal cost of production of sugar was lower in
case of the Gandevi co-operative sugar factory. The cost was
higher in case of the Maroli co -operative sugar factory owing to
heavy expenditures on manufacturing cost including salaries a nd
wages, chemical used, expenditure on machinery repairs and
maintenance and transport of sugarcane, interest on borrowed
capital and other overhead charges.
5.4
SUGGESTIONS
On the bases of conclusion drawn, following suggestions
could be made for improve ment in the economic efficiency of sugar
factories and sugarcane crop.
131
5.4.1
Sugar Factories
Those factories which were not getting adequate sugarcane
for full utilization of the factories, t hey can purchase sugarcane fro m
non share holders either within or outside the jurisdiction of the
factories. This situation resulted in the higher cost of transportation
and
comparatively
reduction
in
the
recovery
percentage.
The
limitation on acreage under sugarcane affected the supply of the cane
to the factories.
The loses of working hours due to shortage of sugarcane,
machinery disturbance, irregular supply of sugarcane (transport), non
availability of machinery parts in time, electricity, shortage of labour,
etc were responsible for the under utilization of the factories.
Any interruption in crushing and working of the factories
increased the cost by way of extra fuel, lubricants, chemicals and
labour payment (wages), etc.
Shortage of labour for harvesting as well as non availability
of cane in the nearby area of the units concerned had contributed to
increase the harvesting and transport cost.
132
The losses are borne by factories due to additional interest
paid and received in the form of loan supplied to the farmers and
received fro m the financing agencies.
Harvesting of sugarcane should be scheduled well so that
harvesting can be matched with crushing without losses of time. Delay
in time between harvesting and crushing reduces the cane weight and
recovery percentage.
Recovery percentage can be increased by introducing
improved and high yielding sugarcane varieties. The cost of sugar
production can be proportionately reduced by producing more sugar
(with high sugar recovery), with full capacity utilization, proper
manage ment,
sugarcane
develop ment
progra mme,
regulation
in
sugarcane supply, reducing the excess burden of interest, etc.
At present many factories in the region do not make best
use of available by-products. If the by-products are properly used and
marketed the factory can make mo re profit and reduce the cost of
sugar production.
133
5.4.2
Cost of production of Sugarcane
Most of the farmers used more number of plantings sets and
fertilizers than reco mmended dose. In so me of the sugar factories area
crop rotation was found less, this results in low yield of sugarcane.
The per hectare cost of production under c ost-C 2 comes to
`181986.10. Income of the cultivators due to sugar factories was
somewhat different and these were due to different prices the y
received under different sugar factories.
However, the net returns of different sugar factory areas
differed fro m one another. Highest net return was obtained in Gandevi
sugar factory area. It was due to higher price paid by Gandevi sugar
factory.
From the different variables viz. human labour, tractor
hours,
manures
and
irrigation
were
statistically
significant
in
sugarcane production.
The sugarcane area in districts of the South Gujarat shows
the
positive
and
significant
trend.
The
sugarcane
productio n
significantly inc reased in the state. To increase the yield of sugarcane
in South Gujarat the recommended dose of fertilizer, planting sets,
irrigation must be used.
134
Sufficient and timely irrigation facilities need to be
provided by irrigation department in summer seaso n.
Sugarcane growers are not fully aware of technological
aspects of sugarcane cultivation. So, proper and timely spread o f
technical knowledge is required so that cultivators be induced to use
optimum dose of fertilizers, FYM, planting sets, new high yielding
varieties, etc. Sugarcane cultivation will be more profitable as
compared to other cash crops by increase the productivity. Sugarcane
cultivation is comparatively more costly. Thus, timely and sufficient
crop finance for the cultivators has become essential.
135
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APPENDIX
APPENDIX-I
NAVSARI AGRICULTURAL UNIVERSITY, NAVSARI
Department of Agricultural Economics
N.M. College of Agriculture, Navsari
“AN ECONOMIC EFICIENCY OF SUGAR COOPERATIVE IN
SOUTH GUJARAT REGION OF GUJARAT”
Investigator's Name :
(1) General information of selected sugar factory :
Name of co-operative sugar factory
:
Address
:
Year of establishment of co -operative sugar :
factory
Year of starting of crushing
Crushing
capacity
at
:
establishment :
(Tonnes/Day)
Present crushing capacity (Tonnes/Day)
:
No. of villages in operational area
:
No
of
villages
supply
cane
within :
jurisdiction area
VII
II
VV
(2) Information regarding shareholders
Shareholders
SN
Year
Producers
1
1987-88
2
1988-89
3
1989-90
4
1990-91
5
1991-92
6
1992-93
7
1993-94
8
1994-95
9
1995-96
10
1996-97
11
1997-98
12
1998-99
13
1999-00
14
2000-01
15
2001-02
Government/
Non
Co-operative
producer
sectore
Total
Total
VIII
II
VV
(3) Area under sugarcane crushed ha/year
Sr.
No.
Year
1
2001-02
2
2002-03
3
2003-04
4
2004-05
5
2005-06
6
2006-07
7
2007-08
8
2008-09
9
2009-10
10
2010-11
11
2011-12
12
2012-13
Total area
Share holders
under
area under
sugarcane
sugarcane
crushed
crushed
Nonshareholders
area under
sugarcane
crushed
Total
IX
II
VV
(4) Sugarcane received for crushing t/year
Share
holders
Sr.
No.
Year
Total sugarcane
sugarcane
crushed
crushed
(operational
area)
1
2001-02
2
2002-03
3
2003-04
4
2004-05
5
2005-06
6
2006-07
7
2007-08
8
2008-09
9
2009-10
10
2010-11
11
2011-12
12
2012-13
Non-shareholders
sugarcane
crushed (outside
the operational
area)
Total
X
II
VV
(5) Information regarding sugar production, sugar recovery and
cane price
Sr.
No.
Year
1
2001-02
2
2002-03
3
2003-04
4
2004-05
5
2005-06
6
2006-07
7
2007-08
8
2008-09
9
2009-10
10
2010-11
11
2011-12
12
2012-13
Crushing
Total sugar Recovery
capacity
production
of sugar
(t/day)
(q)
(%)
Cane price
paid to
farmers
(Rs./t)
Total
XI
II
VV
(7) Information regarding cost of production of sugar of selected
co-operative sugar factory : Gandevi/Maroli
Cost (Rs.)
Sr.
Particulars
No.
Gandevi
1
Cost of Cane
2
Sugarcane purchase tax
3
Sugarcane
quality
Maroli
improve ment
expenses
4
Sugar reprocess expenses
5
Manufacturing
- Salaries and Wages
- Machinery repairs and maintenance
- Chemical cost etc.
6
Managerial
and
administrative
expenses
7
Interest on working capital
8
Miscellaneous
(8)
General Information about management :
1.
Least working hours during the study period :
2.
The main reasons for stopage of factory
:
a.
b.
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II
VV
c.
d.
3.
Sufficient labours are available for crushing?
:
Yes / No
A. If no, Why?
B. Give your suggestion regarding this
4.
Sufficient electricity is available for working of factory? : Yes/
No
A. If no, Why?
B. Give your suggestion regarding this
5.
Sufficient vehicles are available for transportation?
:
Yes/No
A. If no, Why?
B. Give your suggestion regarding this
6.
Which are the proble ms arising after starting the factory? :
Yes/No
If yes, Due to
A. The harvesting of cane is unsufficient through labo urs
B. Difficulties in transport
C. No supply of electricity
D. Due to machinery fault
E. Others
7.
Do you satisfy with levy and free cell sugar ratio?
: Yes/No
If yes, then how much?
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II
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8.
The sanction of new sugar factory is desirable for South Gujarat
region : Yes/No
Why?
9.
10.
Give your suggestion regarding policy implication :
Give your opinion for improved in the econo mic efficiency of the
factory :
XIV
II
VV
APPENDIX - II
NAVSARI AGRICULTURAL UNIVERSITY, NAVSARI
Department of Agricultural Economics
N.M. College of Agriculture, Navsari
“AN ECONOMIC EFICIENCY OF SUGAR COOPERATIVE IN
SOUTH GUJARAT REGION OF GUJARAT”
Name of Investigator: ………………… Date of interview……..
A. General information
1. Name of the respondent:
2. Age:
3. Education:
4. Village:
5. Taluka:
6. District
7. Main occupation:
8. Subsidiary occupation:
B. Family information:
SN
Name
Sex Age Education
Occupation
1.
2.
3.
4.
XV
II
VV
C. Operational holdings (Ha)
SN.
Particulars
Irrigated Un irrigated Land revenue
Land
rent
1. Leased in
2. Own
3.
Area under
Sugarcane
4. Total
D. Sources of Irrigation
SN.
Particulars
1.
Well
2.
Tube well
3.
Others
No
Area
Crop/s
covered
E. Cropping pattern and production pattern
Sr. No.
Cropping pattern
Production Pattern
1.
2.
3.
4.
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II
VV
F. Inventory of Implements, machinery and livestock
SN.
1
Item
Year of
Pu rch ase
Average
Pu rch ase
valu e (`)
Life
No.
Annual
Junk
reparse
valu e
(`)
(` )
Imp lements
a. Iron
plough
b. Wooden
plough
c. Disk
plough
d. Seed Dr ill
e .Hoes
f .Harrows
g. Bullo ck
cart
h. Ot her
2
Machinery
a. Tractor
b. Sprayer
c. Dust er
d. Rott er y
e. Pump set
3
Livestock
a. Cows
b. Buffalo es
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VV
c. Bullocks
G. Labour use pattern. (Per acre/ per ha)
Human Labour (man
days)
Sr.
No.
Operations
Family
Labour
Hired
Men Women Men Women
1
Bullock
(Pair
days)
Machine
Labour
(`)
Land
preparation.
i.Ploughing
ii.Harrowing
iii.Leveling
iv.Others
2
Manure
application
i.Transportation
ii. spreading
3
Planting
i.Set treatment
ii.Planting.
4
Fertilizer
application
XVIII
5
Mulching
6
Weeding
7
Irrigation.
i.
ii.
iii.
iv.
8
PPC application
9
Leaves
removing
10 Harvesting
Price per unit: Men `.
/man day.
Women `.
Bullock labour. `.
/day.
Machine `.
/man day.
/hour.
H. Input cost
Sr.
Particulars
No.
1.
Quantity
Price per
unit (`)
Total cost (`)
Planting Material /
Sugarcane sets
2.
Treatment che micals
3.
Manures
XIX
II
VV
4.
Fertilizers
i.
ii.
iii.
iv.
5.
Mulching material
6.
PP Che micals and
widicides
i.
ii.
iii.
iv
7.
Irrigation charges
8.
Any other costs
Price per unit: Men `.
/man day.
Bullock labour. `.
/day.
Women `.
Machine `.
/man-day.
/hour.
I. Gross Returns
Sr.No.
Product
1.
Main Product (tons)
2.
Bi-product
3.
Total
Quantity
Price (`)
Value (`)
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II
VV
J. Farm Building and Inventory
Sr.
No.
1
Items
No.
Farm building
(K/P)
Value
Sr.
(`)
No.
12
Items
13
Hoe
3
Store room
14
Harrow
4
Bullock cart
15
Rake
16
Plank
Well/Well
6
Electric motor
17
Spade
7
Tractor
18
Ridger
8
Sprayer
19
Sickle
9
Duster
10
Desi plough
11
Iron plough
K – Kachcha,
(`)
drill
Cattle shed
Tube
Value
Seed
2
5
No.
P – Pacca
XXII
II
CERTIFICATE
This is to certify that I have no objection to supply one
copy of any part of this thesis at a time to any scientist through
reprographic process if necessary for rendering reference service
in a library or documentation centre.
Place: Navsari.
Date:
/02/2015
(Parmar Viralsinh N.)