Answer:
1. Small and uneconomic size of mills
2. High cost of Production
3. Government policy
Explanation:
1. Small and uneconomic size of mills:
Most of the sugar mills in India are of small size with a capacity of 1,000 to 1,500 tonnes per day. This makes large scale production uneconomic. Many of the mills are economically not viable.
2. High cost of Production:
High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duty result in high cost of manufacturing. The production cost of sugar in India is one of the highest in the world. Intense research is required to increase the sugarcane production in the agricultural field and to introduce new technology of production efficiency in the sugar mills.
3. Government policy
The Sugarcane sector and Sugar Industry as a whole is heavily controlled by the government. While it is obligatory for sugar mills to purchase all sugarcane cultivated by farmers, the government has no plans in place to restrict production as per demand and requirement.
