According to a recently published study by Gudoshnikov1 at the ISO, productivity gains across the cane sugar sector in the recent past have generally been flat, whereas in the top EU sugar-producing countries, not only is sugar output per hectare greater on average than the average of top cane sugar producers, but since 2001/02 sugar yields have grown by 22% in Belgium, 28% in Denmark, 9% in France, 27% in Germany, 32% in the Netherlands and 31% in the UK. The study concluded that since “since 2011/12 the average sugar yields in the beet sector have been consistently higher than those in the cane sector” (see table). The top beet sugar producers produce on average some 3 tonnes sugar/ha than top cane sugar producers. Arguably, smallholders who dominate cane supply inform the picture of yield stagnation in the sector. With the exception of sugarcane industries in Brazil, Australia and USA, the rest are supported by a sizeable chunk of small-scale cane growers. In China, on average, cane holding in the Guangxi region, main cane producing area, is 0.25 ha, whereas, in India and Thailand, it is 1 ha/farmer and 5 ha/farmer, respectively. In China, cane yields increased on average by the rate of only 1.1% annually over the last decade2. Totally unremarkable, despite the significant R&D et al support from the government.
Whereas in the sugar beet sector, beet growers essentially comprise a community managing relatively large acreage with ample access to support from research institutions and research products for translation into improved crop management, the cane sector comprises factory/company-owned nucleus estate, plantation owners and smallholders. While the former two are resource-rich both management and capital-wise, the latter are invariably not. For example, the Philippines tale of two halves is doubtless repeated elsewhere in the global cane industry – productivity from large farms (>100 ha) is 73.4 t/ha while that from small farms (<5 ha) is 50.3 t/ha.
Underpinning the notion why large-scale farms are superior to small-scale ones is tied to the fact that they are better at applying new knowledge and managing adoption risks. Small-scale farmers in the emerging and developing economies are simply handicapped by the fact that they do not have the suite of “managerial skills, good numeracy and basic science understanding” necessary for effective learning to apply latest innovations in agriculture. “The scarcity of these skills combined with the diverse but specialised skill requirements, make it costly for smallholders to acquire them.” Larger units have the resources and capabilities to effectively “internalize these costs, allowing faster learning”3.
But this does not necessarily presage a constancy that is not vulnerable to change. Two years (2017/18-2018/19) of bumper cane and sugar production in India have been credited to increased availability of the productive cultivar CO-0238. A smallholder in Uttar Pradesh “saw a 25% rise in [cane yield in] the very first year” in 20174. The cane sector in India is dominated by some 50 million cane growers. The concerted drive by the industry has certainly paid a dividend. In Pakistan, similarly dominated by smallholders, while the cane yields over the period 1996/97 to 2010/11 increased from 43.5 to 56.1 t/ha, it increased to further 63.4 t by 2017/18.
The great hope for bridging the yield gap amongst the smallholders is that we now live in a connected world where access to information and transfer of newly produced knowledge has become less of an issue. Eoin Wallis, the former CEO of Bureau of Sugar Experiment Stations pointed out that along the value chain from soil cultivation right through to harvesting, a grower can potentially increase cane yields by some 35 t/ha by adhering to best practice at all stages. It is within the wit of sugar factories to exploit the technologies such as data analytics and blockchain to help drive productivity of growers who supply their cane.
1 Sergey Gudoshnikov (2018) Beet beats cane in productivity race, Int Sugar & Sweetener Report, 150 (8): 135-141
2 Rabobank (2013) Global sugar to 2021: Long-term prospects for production, consumption and trade in key markets (62pp)
3 Paul Collier and Stefan Dercon (2009) African agriculture in 50 years: Smallholders in a rapidly changing world? ftp://ftp.fao.org/docrep/fao/012/ak983e/ak983e00.pdf