The Declining Sugar Sector: why?

By Dr.C.S. Weeraratna

csweera@sltnet.lk

Sugar is one of the main food items consumed in Sri Lanka. The annual per capita consumption of sugar in Sri Lanka is around 30 kg and the current total annual requirement of sugar in the country is about 550,000 t .By 2015, this amount is expected to rise to 600,000 t. In the year 2011, 35,000 t of sugar were produced locally. The balance national requirement had to be imported at a cost of around Rs 47 billion. The expenditure on sugar imports may exceed Rs. 50 billion by 2015 if appropriate action is not taken to improve the sugar sector.

Sugar is not the only product of sugar industry imported. A number of by-products of the sugar industry are also imported involving a considerable amount of foreign exchange. Ethanol is an important by-product of the sugar industry. . Around Rs. 10 billion is spent annually to import ethanol. Bagasse, another by-product of the sugarcane industry could be used to generate electricity. In addition, animal feeds, bagasse based fiber boards, biogas, and numerous organic compounds such as acetone, butanol etc. are other by-products of the sugarcane industry which are imported. Hence, developing the local sugar sector will save a considerable amount of foreign exchange; Increase our food security and employment opportunities in areas such as Siyabalanduwa, Buttala, Badulla. Amapara, Kanthale etc. where there is a very high degree of poverty. Therefore, development of the sugar sector will lead to a considerable socio-economic development of the country.

Mahinda Chintanaya (MC) has recognised the need to improve the local sugar sector. According to Mahinda Chintanaya : Vision for a new Sri Lanka, the need to ensure a reasonable price for sugarcane farmers, low sugarcane yields and low sugar recovery have been identified as some of the factors which affect local sugar production.

But the sugar sector has not shown any development during the past few years.. According to Central Bank annual reports, the average sugarcane yield has decreased from 58 mt/hectare in 2005 to 50 mt/ha in 2011. Sugar production has decreased from 54,000 mt in 2005 to 35,000 mt in 2011, and sugar recovery too has decreased from 8.2% in 2005 to 7.9 % in 2011.

Sugarcane Research Institute:

Sugarcane Research Institute (SRI) has an important role to play in the development of the sugar sector in Sri Lanka. SRI is a statuary body established for conducting research in respect of the growth and cultivation of sugarcane and manufacture of any product there from, for the development of sugar industry of Sri Lanka.. The Vision of SRI is to be the centre of excellence in sugarcane technologies and the leader in sugarcane industry development in the Asian region . However, the sugar industry in Sri Lanka does not show any improvement during the last few years as shown by the figures indicated above.

Sugarcane Research Institute (SRI) which should take a leading role in finding solutions to the factors which limit the development of the sugar sector appears to remain inactive. One of the contributing factors is the improperly constituted. Board of SRI. According to Sugarcane Research Institute Act NO. 75 OF 1981 . three members shall be appointed by the Minister in-charge (the present Minister in-charge of SRI is Mr. Reginald Cooray) from among eminent scientists of proven ability. But the minister has appointed four who have not conducted any research, which any eminent scientist should have carried out. Thus, at present the SRI Board is not constituted according to the Act and hence illegal.

Proposals to improve the

sugar sector:

A few years ago, a number of initiatives were taken by SRI to develop the sugar sector in the country. Among these are

* a national policy for sugar sector development - This policy was formulated by an expert group of scientists in consultation with all stake holders and the sugar industry personnel. The policy was approved by the Cabinet of Ministers at the meeting held on 10 Feb. 2005. This policy document titled" Sri Lanka Sugar Sector Development Policy" had a number of recommendations. One of the recommendations is the expansion of the existing Sugarcane Research Institute to Sugar Research and Development Institute (SRDI), which could undertake activities such as better extension and regulatory functions aimed at promoting developing the sugar sector in Sri Lanka. A draft act on SRDI was prepared to be presented to the Parliament for approval.

* A sugarcane pricing policy was formulated in 2006, with the involvement of the former Deputy Secretary to the Treasury to ensure a reasonable price for sugarcane farmers.

* A program was implemented by SRI to promote productiom of sugarcane jaggery in five districts as a cottage industry to improve the income of the rural sector.

* A program was also implemented to get the involvement of the private sector to establish sugar factories in a number of districts and to rehabilitate the sugar factories at Hingurana and Kanthale.

All these programmes/ activities appear to have been abandoned by the current administration of SRI, and there appears to be no effective programme to rejuvenate the sugar industry in Sri Lanka.

The editor of the ISLAND in his editorial of 6th July 2012, very correctly said that " President Rajapaksa is in an unenviable position. Nothing gets done without his intervention and he has to undo what his ministers do. His wisdom of appointing a jumbo Cabinet stands questioned. He can do without most of his ministers, we reckon..."

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