Question

What would it take for jaggery to expand its market and come back to
being the traditional sweetener? Taking into consideration all the factors stated you have to analyze the market by doing both PESTLE
analysis and the 6 Force Model too. Be sure to ask the right questions to consider and tackle all the pain-points of
the jaggery manufacturers.

Answer 1

The jaggery industry has been considered as one of the small scale and cottage industry in India. It has undergone several changes over the years. The process of preparation of jaggery has also undergone considerable changes. As a result of these changes the jaggery industry is offering a stiff competition to sugar industry for sugarcane. The price elasticity of demand for and supply of jaggery being fairly low and demand for jaggery rising steadily, their price instability is largely attributed to the changes in their production labour, electricity and the consequent changes in the market arrivals. The production of jaggery has not been able to keep pace with increasing demand for it. As a result, the prices of jaggery have been raised sharply in recent years. Hence, it is felt that there is need for a detailed inquiry in to the various aspects of production and marketing of jaggery. The study of this kind would help identifying the extent of profitability in jaggery production; the present study was undertaken with following objectives. 1. To identify the major marketing channels of jaggery and estimate the cost, margins and price spread 2. To estimate the employment potential in jaggery marketing 3. To explore the constraints involved in jaggery marketing and suggest the suitable ameliorative measures to overcome the same. 4. To document the preference of sugar cane growers towards producing jaggery instead of sugar The study was conducted in Bagalkot district in Karnataka, which ranks second after Belgaum in the cultivation of sugarcane with an area of 47556 hectares which comprises 15.16 per cent of total sugarcane area in Karnataka with 400 jaggery processing units. The required data pertaining to year 2007-08 was collected from total 80 randomly selected sample farmers (40 each from two sample taluks) and 20 wholesalers and 20 retailers i.e., 10 each in Mahalingpur and Jamakhandi, the two largest jaggery marketing yards in the study area. Simple tabular analysis and Garret’s ranking technique were adopted to draw valid conclusion. The study on supply chain analysis of jaggery in Bagalkot district of Karnataka revealed maximum per cent (53.75 %) of sample farmers disposing produce through channel I, where in commission agents, wholesalers and retailers are in between producer and consumer. The price spread in channel I was Rs 483.16 per quintal. The producer net price was Rs 1088.69 per quintal. The total cost incurred on marketing of jaggery by producer and middle men was Rs 280.40 per quintal. The total profit margin of the middle men was Rs 178.25 per quintal. However, the price spread and producer net price are high in channel III, where only retailers are in between producer and consumer in the chain. The limited availability of retailers in the study may be the reason for choosing channel I by majority sample farmers. Besides, the price fluctuations, lack of market information and infrastructural facilities are the major constraints in jaggery marketing in the study area. Production of jaggery found more profitable than sending cane to sugar factory with benefit cost ratio 1.83 and 1.08 respectively. There are 157 jaggery processing units and two major jaggery marketing yards located in study area which generate 296730 and 99962 man days of employment in both taluks

Traditionally India has been a hub for producing jaggery which is also known as Gur, Gula, Panela, Rapadura, Raspadura in various countries and has been termed as Non-centrifuged dehydrated sugarcane juice by Codex Alimentarius. In-spite of jaggery scoring many points over the other sweeteners, the sector has remained hugely unorganized and the potential has not been harnessed to the extent possible. It offers enormous possibilities of technological up-gradation, product innovation and value addition. The paper discusses many such options available for adoption so as to provide superior quality jaggery with enhanced shelf life.

Agriculture is the backbone of Indian economy accounting for about 18% of Indias gross domestic product (GDP) and also supporting livelihood of more than 50% of the countrys workforce. Among the major agro-processing industries in India such as dairy, meat & poultry, food grains etc., sweeteners are known to be the oldest, one of the largest and most valued industry. India has now become the largest producer and consumer of sugar with its production reaching up to 33 MMT for marketing year (MY) 2018-19. Uttar Pradesh & Maharashtra are the major sugar producing states and as far as Uttar Pradesh is concerned, it is said to be the largest state in sugarcane production in the country. Uttar Pradesh alone contributes to 42-44% of the countrys total sugarcane production and also occupies the top of the list in being the largest sugar producing state with around 107.19 Lk ton during the marketing year (MY) 2018-19.

Sugar and jaggery (also known as gur) are known as the most valued, traditional sweetening agent primarily obtained from sugarcane. Nearly 70% of the global production of jaggery is done in India and this sector supports huge rural economic system providing employment to millions of people [1]. The never ending demand of high quality, green & clean labelled, organic, nutritious food products amongst the diet conscious people has influenced the food processing sector to innovate and add value to the existing product line with a view to provide health and wellness to its consumers. Being the major agro-processing industry in the rural sector, there is a greater need to uplift the jaggery processing sector which would thus provide higher value jaggery and jaggery based products at reasonable cost and would in turn help the rural economic system to prosper.

1. JAGGERY PRODUCTION & CONSUMPTION SCENARIO IN INDIA

   India during the last couple of years has produced more than 300 MMT of sugarcane out of which, about 79.91 % is utilized in producing white sugar, 11.29% in producing jaggery and khandsari, 8.80 % as cane juice, seed cane for the next harvest etc. Sugar recovery for different states in India lies in the range of 8.89 to 11.26% on cane (MY 2018-19), whereas, recovery of jaggery (gur) ranges from 10 13% depending upon the variety of sugarcane, sugarcane quality, soil texture, irrigation facilities, time of cane crushing etc., [2]. Still by and large jaggery is produced in a conventional manner carrying out boiling in bels heated by naked fire and under rather unhygienic conditions. The quality and also the keeping quality is always wanting. Hence, the untapped potential of this jaggery sector should be given a food for thought towards value addition and innovation. Out of the total world production, more than 70% jaggery is produced in India [3]. Jaggery, an unrefined, natural, non-centrifuged sugar is produced using natural clarificants of vegetable origin and at times use of objectionable chemicals are also made in order to produce better quality jaggery. Looking to its present nutritional status and mind-set of people for natural products, jaggery has immense growth potential market both in national & international market due to its high nutritional & medicinal value.

   It is pertinent to mention that being the lead producer of jaggery, India is said to be the leading traders & exporters of jaggery to the world. Around 3,13,826.00 MT of jaggery worth Rs. 606.8 crores/230.03 million USD is reported to be exported by India in the year 2018-19. According to a report provided by ISMA & GAIN report for the marketing year (MY) 2018, the average production of jaggery is expected to reach to 6.6 MMT [4].

   Jaggery is known as a healthier sweetener and a good replacer of sugar and other artificial sweeteners in many applications. It is also known as medicinal sugar rich in vitamins and minerals, finding its use in Ayurvedic medicine as a blood purifier and also used for curing infections [3][5]. Traditionally jaggery is used in sweets and savory food products, now-a-days with the advancement in processing, storage & packaging technologies of jaggery, it may be used as sweetening agent in manufacturing various beverages, as base material for various syrups. Jaggery may also find its application in confectionery products such as hard boiled sweets, biscuits, breads, pastries etc., besides using jaggery for direct consumption [6]. Apart from India, jaggery has seen its application in many other parts if the world. For

   instance, the world jaggery consumption could be divided into four distinct market [7].

   The development of the jaggery world consumption depends then on increasing its competitiveness as a sweetener and ingredient vis-Ã -vis its competitors, that is, in the direct household markets, the food-ingredient markets and in other industrial markets. This competitiveness will be accessed by the diversity and convenience of its presentations, its safety and quality, and cost

   1. The largest market constitutes the rural, small town and large city rural population. The main jaggery producing countries, principally India, Colombia, Pakistan, China, Brazil, Bangladesh, Myanmar and Philippines. Colombia has the largest yearly per capita consumption of jaggery with around 10 Kg for 2009, followed by Myanmar with around 7 Kg/year/capita. Indias yearly per capita consumption is less than 4.0 Kg/year/capita. The consumption of jaggery of the other listed countries lies in the range of 2-4 Kg/year/capita.
   2. The second largest market for jaggery is its application for the production of alcoholic beverages and in other fermentation industries, both in the producing countries and also for export markets. One of the greatest examples are rum worldwide, Shochu in Japan and Cachaza in Brazil.
   3. The third market is the household consumption by middle and high income consumers, both in jaggery producing countries and export markets. This market is growing, mainly because of organic jaggery in export markets (International Sugar Organization 2013).
   4. Finally, a small, still incipient, market of jaggery is its use as a food industry. Main industries using jaggery as an ingredient are the beverage, confectionery, bakeries and sauces industries.
2. EXPLORATION OF NEW AVENUES IN JAGGERY PROCESSING

   With the advent of modernization and introduction of new technologies while quality of sugar has improved to a greater extend in order to cater to the sector specific requirements of the market, jaggery production is still confined to small scale cottage industry usually for local consumption, using traditional technologies necessitating measures to be taken for quality improvement [13]. With the passage of time although the jaggery industry has witnessed growth in many folds, but sadly there isnt any significant improvement in its performance, technical efficiency and recovery. Few reasons as to why old technologies are still in practice for jaggery manufacturing are:

   1. Lack of government policy support
   2. Dis-organized micro and small scale sector
   3. Lack of will & financial constrains to adopt new technologies
   4. Poor education of craftsmen involved in jaggery processing

      There are several jaggery units which are on the verge of closure as a result of traditional technologies, low market price for jaggery in comparison to Fair Remunerative Price (FRP) /State Adviced Price (SAP) for sugarcane With the passage of time, on one hand, sugarcane utilization for production of white sugar has increased from 33.47% (1980-81) to 79.91% (2017-18) while that for gur (i.e. jaggery) and khandsari has decreased from 54.73% (1980-81) to 11.29% (2017-18) that while the per capita consumption of sugar increased from 7.3 kg per annum (1980-81) to 19.3 kg per annum (2017-18), for jaggery (gur) and khandsari, the per capita consumption decreased from 12.5 kg per annum (1980-81) to 4.1 kg per annum (2017-18) [14].

      Percentage of sugarcane production utilised for production of white sugar, Gur & khandsari

      Per capita consumption of sugar, Gur & khandsari

      Apart from technological and policy barriers, obstacles

      such as unawareness amongst both food industry personnels and common public concerning the health benefits associated with jaggery prevents this sector to flourish. As mentioned earlier, more that 70% of jaggery is produced in India, the time is not far when this jaggery sector may create a huge revolution better than sugar.

Increasing area under sugarcane due to expansion of area under irrigation can be regarded as an opportunity for the growth of jaggery industry. New varieties have also been developed suitable for jaggery production. Similar results were obtained by Pawar and Dongare (2001) in their study on jaggery processing in India. In the era of organic products, the demand for organically produced jaggery is increasing. Being a healthy sweetener, quality jaggery and its value added products such as jaggery chocolate and confectionaries made of various combinations of cereals, it is possible to significantly increase export of jaggery in solid powder and liquid forms. India contributes more than 70 per cent to the jaggery production of the world. It is being exported to many countries like, Bangladesh, Great Britain, Canada, Chili, Egypt, Fiji, Iran, Iraq, Kuwait, Malaysia, Nepal and USA.

CONCLUSION

Sugarcane based industry plays a vital role in strengthening the agricultural sector. Manufacturing of high quality, value-added jaggery with a sense of hygienic processing & packaging would help in providing an excellent integrated development of the sugar industry and would also help in transforming the rural economy into a dynamic and buoyant industrialized economy. Initiatives like the ones mentioned in the paper would help the industry to venture into a new market thereby creating job opportunities to a major class of group and would also give the market and its customers a quality product.