Mechanisation helps sugar mills tackle rising cane harvest costs

Hindu Business Line - 21/4/11

Runaway increase in labour cost for sugarcane harvest has hit growth of area for the crop in Tamil Nadu. Mechanisation is emerging the only long term option, say sugar millers.

Labour for harvest that was around Rs 375-400 a tonne at the start of the season has increased to about Rs 550 and even Rs 600 in some places. This is about a third of the sugarcane price that farmers get, making it unattractive to them. In addition to the cost, the shortage of labour aggravates the problem.

During the current season, the State Government has fixed the price for sugarcane at Rs 2,000 a tonne, including transport charge, linked to a sugar recovery of 9.5 per cent. This is nearly twice the price paid in 2006-07 when the State Advised Price was Rs 1,034 a tonne, linked to 9 per cent sugar recovery. Labour was around Rs 100 then, according to industry figures.

The increase in labour costs has eroded the benefit of higher sugarcane price. Leading sugar mills are looking at mechanisation of harvesting as a solution.

Thiru Arooran Sugars has inducted about 30 harvesting machines in the last few years across its four mills. It now has 22 in operation, and is adding eight more during the current season, said Mr Ram V. Tygarajan, Chairman and Managing Director, Thiru Arooran Sugars. “Without mechanisation, there is no future for sugarcane,” he says.

Tamil Nadu's peak sugarcane output of about 258 lakh tonnes in 2006-07 is not likely to be repeated in the near future. Mills are struggling to get to 160 lakh tonnes.

Sakthi Sugars, among the earliest to mechanise, has 10 machines in operation and is considering more. Nearly half the harvesting at one of its mills has been mechanised, according to its Vice-Chairman and Managing Director, Mr Manickam.

Mechanised harvesting costs around Rs 300-400 a tonne, in addition to the advantage of assured availability. But for now, due to the high costs of machines individual service providers cannot offer harvesting services, as they do for paddy cultivation which is almost completely mechanised. Typically, a set of sugarcane-harvesting machines, including the cutting machine and accompanying loaders, can cost up to Rs 1.25 crore-1.5 crore, he says.

Challenge

Mr Tyagarajan says companies face the challenge of investing ahead of cane availability, as that is the only option to increase cane areas now. This year's planting will be dependent on the harvesting capacity of sugar mills. Increasingly, farmers, too, are accepting the idea of mechanised harvesting, and are changing the cultivation practice to enable mechanisation.

The mills are now working on increasing efficiency and output of the harvesters, which are new to the field conditions here, he says.

According to industry sources, one machine does the job of about 60-65 workers. A pair of workers can cut up to 1.5 tonnes of sugarcane a day, while a machine cuts 150 tonnes in 12 hours. But the machines are capable of cutting up to 400 tonnes. As is the norm for mechanisation, large blocks of land and level conditions are ideal, but that is often not the case. Mills charge around Rs 350 a tonne, while the actual cost could work out much higher. But costs could be controlled with increasing efficiency. In a cutting season lasting about 160 days, the machines should cut about 40,000 tonnes, but now the operators are managing about one-fourth of that capacity.