Indian economy is basically agrarian economy. On 2.4 percent of world land India is managing 16 percent of world population. At the time of independence, more than half of the national income was contributed by agriculture. At the same time more than 70 percent of total population was dependent on agriculture. The first five year plan has emphasis on agriculture development. Also the green revolution strategies adopted during 60s has contributed a lot in making India self sufficient in food production. With advent of new economic policy adopted since 1991, the picture has changed drastically.

Agro-based entrepreneurship mission and the agro-based entrepreneurship education should go hand in hand. Mass employment generation is possible with agro-based industrialization. Agro-industrial according to the New Webster's Dictionary of English Language (1995), Agroindustrial (adj).... means an activity favouring both agriculture and industry. Agro-industry, means industries that largely depend on Agricultural products for its sustainability.

Agro-processing industries refer to those activities that transform agricultural commodities into different forms that add value to the product. "Agro-based industries are those industries which have either direct or indirect links with agriculture (Bhattacharya 1980). Agro-processing industries, especially food manufacturing, tobacco and textile processing dominate the commercial industrial sector. In this sense the agro- processing could be defined as set of techno economic activities carried out for conservation and handling of agricultural produce and to make it usable as food, feed, fiber, fuel or industrial raw material. Hence, the scope of the agro-processing industry encompasses all operations from the stage of harvest till the material reaches the end users in the desired form, packaging, quantity, quality and price. Ancient Indian scriptures contain vivid account of the post harvest and processing practices for preservation and processing of agricultural produce for food and medicinal uses. But, inadequate attention to the agro-processing sector in the past put both the producer and the consumer at a disadvantage and it also hurt the economy of the Country (Kachru 2008).

Agro-based industries play a vital role in the development of Indian rural economy. India's 70 per cent of total population directly depends on agriculture and agro-based industries. Sugar industry is one of the most important agro-based industries in the development process of rural India. Therefore, the study has selected this agro-based industry and analysed sugarcane and sugar production, trends of sugarcane and sugar product, recovery of cane during the period 1950-51 to 2010-11. Maharashtra and Uttar Pradesh are two largest sugar producer states in India. So, the study has also discussed the comparative growth of sugarcane production and sugar industries in Maharashtra and Uttar Pradesh states of India. The study has revealed that India is the second largest producer of sugar in the world. India has produced 24394 thousand tones sugar from 527 factories in the year 2010-11 (Takale, D.P., 2013). The study has also found that near about 61 per cent of total sugar production in India has produced in Maharashtra and Uttar Pradesh states only.

Agro-based industry is depends upon agriculture sector for raw materials. This industry is the main market of agricultural commodities. In India, major agro-based industries are sugar industry, cotton textile industry, oil industry, jute industry, food processing industries, paper industry etc. Sugar industry is the important agro-based industry in India. Employment opportunity in rural area of the country is increasing due to establishment of more and more agro-based industries. Farmers gets reasonable price of agro-based product by interlinking of agro-base industry and farmers. Internal and external economies are useful to rural people due to establishment of agro-base industries. Rural infrastructure is developed with the help of these industries.

The development of agro based industries can help to realise the various linkages or inter-relationships between industry and agriculture. The Ninth Five Year Plan aims at the objective of attaining rural development of agriculture for attaining rural development. If the agro-based industries are developed it will be possible to reduce regional imbalances and also to realise the essential goal of rural development of generating employment opportunities on a large scale for the weaker sections of the rural society.

The Indian sugar industry comprises about 20 per cent of sugar mills and 15 per cent of sugar production of the world. It is the second largest agro-processing industry in the country, with total employed capital of Rs. 50000 crores and an annual turnover of Rs. 25000 crores. It plays a key role in rural development by creating indirect employment for over 7.5 per cent of rural population engaged in sugarcane cultivation, harvesting and ancillary activities and direct employment to 5 lakh skilled and unskilled workers. It contributes about Rs. 2500 crores annually to the Centre and State exchequers in the form of taxes (ISMA, 2004). The industry has remained a focal point for socio-economic development in the rural areas by mobilizing rural resources, generating employment and income and creating transport and communication facilities (GOI, 2002).

Indian sugar production has reached 188 lakh tons by end Feb’13 which is a tad below last year’s output by 0.31%. According to the Indian Sugar Mills Association estimates about 246 lakh tons was produced for the sugar season 2012-13. Indian sugar production is poised to increase to 29.8 million metric tons in the next year due to an expected increase in sugarcane production. With a surplus sugar production and strong export demand for 2012/13, India will continue to be a net exporter of sugar for the second consecutive year, with exports likely to reach as much as 2.5 million tons. Continued strong demand from bulk consumers will push sugar consumption to 26.5 million tons.

Maharashtra has produced 7.7 million tonnes of sugar, about 4 per cent lower than last year. In Uttar Pradesh, sugar output stood at 6.75 million tonnes, marginally higher than corresponding last year’s 6.67 million tonnes. Karnataka has produced 3.29 million tonnes of sugar till March 2013, about 7 per cent lower than last year. Tamil Nadu’s sugar output is down 3 per cent at 1.35 mt. ISMA has estimated that sugar output is 24.6 million tonnes for the 2012-13 season, marginally lower than 26 mt produced in the previous year.

Sugar production had for a third consecutive year strong growth in 2012/13 after moving through a downward cycle in 2008/09 and 2009/10. India's total centrifugal sugar production in 2012/13 was 29.75 million metric tons, which includes 435,000 tons of Khandsari sugar. In 2012/13 gur production was higher at 4.4 million tons due to firm prices. Sugar production till March-end of the current 2012-13 sugar year is down 2 per cent at 23.05 million tonne, the Indian Sugar Mills Association said. In the corresponding last year, sugar output stood at 23.45 million tonnes. Average recovery or the amount of sugar produced from the cane crushed stood at 10.09 per cent during the current season, about 0.2 per cent lower than last year.

Uttar Pradesh is the largest sugarcane producing State in India. During 2002-03, 111 sugar mills1 were in operation and crushed 64.51 million tones of sugarcane which was almost 50 per cent of the total production of the country. The sugar industry consists of private, cooperative and public sector mills that spread over the western, central and eastern regions of the State. Over 50 per cent of these mills are in the private sector and the remaining mills are in the other sectors.

Uttar Pradesh Sugar Industry is one of the largest sugar industries in the Indian economy. The lavish measures in form of new promotional policies for the Uttar Pradesh sugar industry by the state government of Uttar Pradesh was introduced at a time when it was much needed to further boost the growth of the Uttar Pradesh sugar industry. The improvements in the plant capacity and the introduction of new techniques which enables the optimization of the existing plant capacities has the further made the growth definite.

With the new promotional policies of the Uttar Pradesh sugar industry, the investors have already starting eying the future prospects. There are 20 more sugar processing units are coming up as a part of Uttar Pradesh sugar industry. The existing companies under the Uttar Pradesh sugar industry are planning an investment pertaining to expansion of about Rs 4,000 crore. At present the major companies in the Uttar Pradesh sugar industry are Balrampur Chini, Bajaj Hindusthan Ltd., etc. A batch of Brownfield and Greenfield expansion projects has already started their activities of crushing cane. The increase in the capacity would help the Uttar Pradesh sugar industry to churn out an extra 140,000 tons of crushed cane everyday to the existing 2.5 million tons of sugar produced within a few years time. The total sugar production under the Uttar Pradesh sugar industry would lead to 7.5 million tons, making Uttar Pradesh the biggest manufacturer of sugar in India.

The Uttar Pradesh sugar industry has a bright future as one of the prospective players in the global sugar market. The demand for sugar across the world has been growing exponentially. The Uttar Pradesh sugar industry with its capacity can cater to this international demand. The advantages of the Uttar Pradesh sugar industry are that the cost of production is quite low and the climatic conditions and the conditions of the soil are favorable to the sugarcane production. The region of India where the state of Uttar Pradesh lies is one of the most fertile lands in India called the 'doab'. This is an extremely fertile belt of lands between the rivers Ganges and Jamuna. To boost the production of the Uttar Pradesh sugar industry, the government of Uttar Pradesh is likely to set up a research and development unit which would develop better quality sugarcane plants to have better yield and diseases-resistant crops to ensure that the industry has a sustainable growth. The geographical position of the state of Uttar Pradesh is one of the key advantages as it is very easy to access. With all these developments the Uttar Pradesh sugar industry can meet the increasing domestic demands in India, which due to the improvements in the economic conditions and the rise in the general income level. The present consumption of sugar is nearly 19 MT annually and it may go up to 24 MT on a yearly basis.

Uttar Pradesh is a major contributor to the national food grain stock. Partly this is due to the fertile regions of the Indo-Gangetic plain and partly owing to irrigation measures such as the Ganges Canal and tube-wells. Western Uttar Pradesh is more advanced in terms of agriculture as compared to the other regions in the state. Majority of the state population depends upon farming activities. Wheat, rice, pulses, oil seeds and potatoes are the major agricultural products. Sugarcane is the most important cash crop throughout the state.

Sugar industry in India is presently grappled with numerous issues which do not seem to have settled so far. These problems are even severe in the country’s second largest producer of sugar, Uttar Pradesh. In the first five months of the sugar year (October 2013-September 2014), the state has produced 4.3 million tonnes of sugar. This is 14.7 per cent lower than the sugar output in the same period a year ago. As per the second estimates of sugar production released by the Indian Sugar Mills Association (ISMA), sugar output in Uttar Pradesh is expected to be 6.6 million tonnes in 2013-14. This is much lower than the sugar output of 7.5 million tonnes in 2012-13. One of the main reasons for this is the diversion of sugarcane towards production of other sweeteners (apart from sugar) due to late crushing by sugar mills in the state.

Sugar mills in Uttar Pradesh delayed sugarcane crushing this season due to lack of clarity over sugarcane pricing. Every year, Central government announces a Fair and Remunerative Price (FRP) of sugarcane, which the sugar mills have to pay to the farmers producing sugarcane. The states are free to top-up this FRP and announce a State Advised Price (SAP) of sugarcane. The FRP of sugarcane for 2013-14 set by the Centre was Rs. 210 per quintal. Over the years, the SAP of sugarcane in Uttar Pradesh has increased manifold. It was Rs. 205 per quintal in 2009-10 which rose to Rs. 280 per quintal in 2012-13, highest among all major sugar producing states.

The rising cost of sugarcane combined with low domestic sugar prices, has put sugar mills in Uttar Pradesh in a financial crunch. According to ISMA reports, cost of sugar production in Uttar Pradesh is around Rs. 35-36 per kilo while the ex-factory price is only Rs. 28-28.5 a kilo. This makes it difficult for them to pay for the high cane prices.

The current sugar season (from October 2013 to September 2014) in Uttar Pradesh began with a huge backlog of cane arrears of sugar mills amounting to Rs. 23 billion. In the backdrop of uncertainty over cane prices and huge cane arrears, 65 of the 100 private sugar mills in Uttar Pradesh served a notice to the Cane Commissioner for suspension of the 2013-14 sugarcane crushing season on 19 November 2013. These include some of the major private sugar mill owners like Bajaj Hindusthan, Balrampur Chini and Dhampur Sugar Mills. On 20 November 2013, the state government decided to keep the SAP for the current sugar year unchanged at Rs. 280 per quintal. This created resentment among sugar millers in the state who demanded a lower SAP of Rs. 225 per quintal. As the sugar mills threatened to stop crushing operations, the state government served an ultimatum to begin crushing operations by 7 December 2013 or face legal action.

Problems of Sugar Industry in Uttar Pradesh

Indian sugar industry is the best agro-based industry in the development of rural base economy. Now this industry is facing various problems in the globalization period. Some of the important problems are discus below :

1. Problem of raw materials (sugarcane): Sugarcane is the raw material of sugar industry. Production and productivity of sugarcane cultivation is not same different part of Uttar Pradesh. Production is mainly depends on the rainfall condition as well as irrigation facilities in the region. Uttar Pradesh has highest sugarcane producer but the fluctuation of sugarcane production is the major problem of sugar industries due to gaining dual price, farmers immediate changed his cropping pattern so reduce the sugarcane production. Inefficient supply of these raw materials is the main obstacles in the development of this agro-based industry.

2. Management Problems: Many units are facing various problems due to lack of professional management. Many sugar industries are appointed untrained director as well as chairman. Large number of sugar industries have invested huge amount of money in buildings and unproductive in nature. Some of these agro-based industries have diversified the funds of the industry in constructing their homes. As a result of this, sugar industries are not earning good profits.

3. Production Problems: Production problem is one of the major problems in these agro-based industries due to less capacity utilization. There is no single sugar industry in not only U.P. but India which is utilized total days of the year. The season of this sugar agro-based industries are maximum limits of six or eight months in a year. The remaining period all most all sugar industries are closed.

4. Pricing Policy of Sugar: Many sugar industries are facing the problems of dual pricing policy of sugar. Levy price and market price of sugar product are different. Levy price is controlled by Government of India. Market price is determined by demand and supply force of sugar in the open market. Government has purchased sugar from every industry at low level of price. Market price of sugar is higher than the levy price. As a result of this dual price, the sugar industry cannot cover maximum profits.

5. Labour Problems: Working efficiency of sugar factory is depends on the availability of skilled labour. Sugarcane cutting and transportation is the difficult work due to inefficient labour force. The main asset of the any sugar unit is its manpower. If industries get right number and skilled labour the profitability and productivity enhance manifold. In sugar agro-based industries have to hire labour from the outside part of industrial region.

6. Problems of Sugarcane Price: In the recent year, sugarcane price is the important problematic policy in Maharashtra. The demand of sugarcane price by the cane farmers is higher and higher.

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Received on 22.08.2014 Modified on 05.09.2014

Int. J. Rev. & Res. Social Sci. 2(3): July- Sept. 2014; Page 194-197