CHAPTER V OPERATIONAL PERFORMANCE OF CO-OPERATIVE...
Transcript of CHAPTER V OPERATIONAL PERFORMANCE OF CO-OPERATIVE...
CHAPTER V
OPERATIONAL PERFORMANCE OF CO-OPERATIVE SUGAR
MILLS IN TAMILNADU
5.1 Introduction
Operational performance of a business is vital for growth and development. In
this context, this chapter is devoted to operational performance of sugar mills of Co-
operative sector in Tamilnadu. The present study focuses on operational performance
of Co-operative sugar mills production, yield, cane crushed, recovery, and capacity
utilization. These operational performance factors are measured and analyzed with
the help of statistical tools such as simple regression, t-test and growth rate. In
addition the operational performances of Co-operative sugar mills are studied with
the help of hypothesis testing to conclude the study and the same are narrated in
upcoming paragraphs.
Operational efficiency is the relationship between quality and quantity of
goods produced and the resources used to produce them. So the analysis in this
chapter is mainly based on the quantitative aspect of sugarcane yield and sugar
production.
Labour efficiency is not mainly taken up as the increase in operational
efficiency. This is due to the influence of the technological factors or revolution in
the new methods of production or other external factors. The financial aspects of the
sugar mills are to be analyzed in the next chapter.
To mention briefly, in spite of surplus production, sugar mills are incurring
losses because of the Statutory Minimum Price (SMP) and State Advised Prices
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(SAP), which they are compelled to pay mandatorily. Each mill has arrears of
sugarcane prices payable to the farmers. Levy price and open market prices are fixed
by the government. In addition, the quotas for public distribution system and open
market are regulated by the government. Since the market forces are not in free play,
various financial aspects are also to be analyzed. Further, subsidies are offered by the
Government, Quantitative analysis is undertaken for recovery and capacity
utilization.
5.2 Co-operative Sugarcane Production
Operational efficiency is measured through the production of sugarcane, for
production the area for cultivation of sugarcane is phenomenal. Table 5.1 shows the
area under sugarcane against each year during the study period.
Table 5.1
Area under sugarcane in Tamilnadu
Year Area ( in 000’ hectare)
2002-03 261
2003-04 192
2004-05 232
2005-06 336
2006-07 391
2007-08 354
2008-09 309
2009-10 293
2010-11 336
2011-12 286Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.70
The area under sugarcane cultivation has shown an increasing trend except for
2003-04 and 2004-05. During these two years it has come down sharply. The increase
in the area of cultivation of sugarcane has been quite steep during 2006-07 and
2007-08. The cultivation of sugarcane has come down to 286 thousand hectares at the
end of study period.
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5.3 Yield of sugarcane
The yield of sugarcane cultivation per hectare gives an idea of the efficiency of
production. A comparative data on state-wise production of sugarcane per hectare is
given in the table 5.2.
Table 5.2
Yield of sugarcane (tonnes/hectare)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.72
Table 5.2 shows the sugarcane yield of states which shows good progress in
production of sugar. When compared to other states, Tamilnadu has achieved the
highest yield in almost all the years and the quantum of yield is far ahead of other
states. It is also very much higher than All India figures. As compared to All India
yield Tamilnadu boosts to 145%, 155%, 156%, 157%, 153%, 156%, 164%, 145%,
155% and 146% respectively.
The sugarcane yield / hectare in Tamilnadu viewed as percentage of All India
yield is shown in table 5.3. The sugarcane per hectare in almost during the study
period is quite high. But looking at the trend in yield the performance is not very
high. The trend declined during the year 2009-10 and 2011-12.
Sta
te/Y
ear
AP
Gu
jara
t
Ka
rna
tak
a
Ma
ha
rast
ra
TN
UP
All
Ind
ia
2002-03 66.20 69.40 84.90 74.40 92.40 56.30 63.60
2003-04 72.10 71.80 65.80 57.90 91.90 55.50 59.40
2004-05 74.90 74.10 80.20 63.20 100.80 60.70 64.80
2005-06 76.80 74.00 83.40 77.60 104.70 58.20 66.90
2006-07 82.20 73.00 87.90 74.90 105.60 59.60 69.00
2007-08 82.20 72.00 85.80 80.90 107.50 57.20 68.90
2008-09 78.50 70.20 83.00 79.00 106.20 52.30 64.60
2009-10 74.10 80.50 90.30 84.90 101.50 59.30 70.00
2010-11 77.90 72.40 93.80 84.90 108.40 56.70 70.10
2011-12 82.00 70.20 90.30 80.10 102.80 59.60 70.30
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Table 5.3
Yield of sugarcane in Tamilnadu (per hectare)
Year Yield/Hectare Growth %
2002-03 92.40 -
2003-04 91.90 99.46
2004-05 100.80 109.68
2005-06 104.70 103.87
2006-07 105.10 100.38
2007-08 107.50 102.28
2008-09 106.20 98.79
2009-10 101.50 95.57
2010-11 108.40 106.80
2011-12 102.80 94.83 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.72
5.4 Production of sugar
The state wise production of sugar and the comparisons of sugar production
among states that are good in sugar production are displayed in table 5.4
Table 5.4
State wise sugar production (in 000’ tonnes)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.85
Sugar production has been fluctuating in all the states. This indicates the
common problems besetting the industry and the market conditions.
Especially the problems were high during the year 2003-04 and 2004-05 in all the
Sta
te/Y
ear
AP
Gu
jara
t
Ka
rna
tak
a
Ma
ha
rash
tra
TN
UP
2002-03 1210 1252 1868 6279 1644 5651
2003-04 886 1066 1116 3175 921 4552
2004-05 982 797 1040 2217 1108 5037
2005-06 1236 1168 1943 5197 2142 5784
2006-07 1680 1425 2662 9100 2539 8475
2007-08 1335 1366 2900 9075 2141 7319
2008-09 593 1012 1651 4578 1597 4064
2009-10 575 1189 2558 7067 1280 5179
2010-11 1006 1235 3683 9054 1846 5887
2011-12 1135 1000 3872 8977 2379 6974
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states. The sugar production has gone down in all the states during these two years.
Sugar production in Tamilnadu had a severe setback during 2003-04, but made a
slow recovery in the next five years. Again there was a decline during 2009-10 but
started picking up from 2010-11. For further evaluation, sugar production is studied
against All India figures and the same is shown in table 5.5.
Table 5.5
Sugar production in Tamilnadu as percentage of All India production
YearProduction in
Tamilnadu
Production in All
India
TN as % of
All India
2002-03 1644 20145 8.16
2003-04 921 13546 6.80
2004-05 1108 12690 8.73
2005-06 2142 19267 11.12
2006-07 2539 28367 8.95
2007-08 2141 26357 8.12
2008-09 1597 14539 10.98
2009-10 1280 18912 6.77
2010-11 1846 24394 7.57
2011-12 2379 26343 9.03Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.85
As from percentage of All India figures, production of sugar in Tamilnadu
showed in the table 5.5 indicates declining performance during 2003-04 and recovered
slightly in 2004-05 onwards. Yet the recovery was not anywhere near 2005-06, which
was in peak of the performance indicated by 11.12 percent of All India figures. To
observe the operational trend in sugar production, year to year percentage is
calculated and the same is displayed in the table 5.6.
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Table 5.6
Yield of Sugarcane (per hectare)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.85.
Year to year percentage in table 5.6 reveals the increase in production from
2002-03 to 2005-06 with the highest production in the year 2005-06. Thereafter it
was a case of steep decline in the next three years. But 2010-2011 production has
registered an increase with a mild recovery.
Another importance of operational efficiency is the production of sugar per
hectare. Table 5.7 explores state-wise sugar production per hectare of sugar
cultivation. Though all the cane produced may not be utilized for sugar production,
dividing the sugar produced by a common denominator of area under sugarcane
provides an objective measures.
Year Yield/Hectare Production (in %)
2002-03 1644 -
2003-04 921 56.02
2004-05 1108 120.30
2005-06 2142 193.32
2006-07 2539 118.53
2007-08 2141 84.32
2008-09 1597 74.59
2009-10 1280 80.15
2010-11 1846 144.22
2011-12 2379 128.87
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Table 5.7
Sugar production per hectare (in tonnes)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.85 & Indian Sugar
Dec,12.P.102
It is observed from the table 5.7 that the sugar production per hectare in
Maharastra is the maximum of 10 to 11 tonnes/hectare due to soil condition and
irrigation facilities. Also there is efficiency of performance with backup services. But
the performance of Utter Pradesh is very poor when compared to the other states.
Production of sugar in Tamilnadu is at an average level hovering between 4 and 8
tonnes per hectare. Production of sugar per hectare may be compared to All India
performance. The details are presented in the following table 5.8.
Table 5.8
Sugar production per hectare in Tamilnadu and All India (in tonnes)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.70 &Indian Sugar LX11, No.9
Dec,12. P.102
Yea
r
AP
Gu
jara
t
Ka
rna
tak
a
Ma
ha
rast
ra
TN
UP
2002-03 5.22 6.17 4.88 10.85 6.30 2.63
2003-04 4.24 5.99 4.77 7.17 4.80 2.24
2004-05 4.68 4.05 5.84 6.84 4.78 2.58
2005-06 5.37 5.93 8.87 10.37 6.38 2.68
2006-07 6.36 6.66 8.17 8.67 6.49 3.77
2007-08 5.40 6.47 9.51 8.30 6.05 3.36
2008-09 3.03 4.58 5.86 5.96 5.17 1.95
2009-10 3.26 7.72 7.59 9.35 4.37 2.62
2010-11 5.24 6.56 8.71 9.38 5.49 2.77
2011-12 5.56 4.95 9.00 8.78 8.32 3.23
Year Co-operative Sector in TN All India
2002-03 6.30 4.46
2003-04 4.80 3.44
2004-05 4.78 3.47
2005-06 6.38 4.59
2006-07 6.49 5.51
2007-08 6.05 5.21
2008-09 5.17 3.29
2009-10 4.37 4.53
2010-11 5.49 4.99
2011-12 8.32 5.18
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Even though Tamilnadu had fared poorly in sugar production per hectare when
compared to Maharashtra, its performance is much better when viewed in relation to
All India performance. Tamilnadu has done better when compared to Utter Pradesh
during the study period.
For reviewing sugar production in Tamilnadu, year to year ratios was
calculated. The table 5.9 furnishes year to year ratio of sugar production in
Tamilnadu.
Table 5.9
Co-operative sugar production in Tamilnadu year to year ratio
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.70 & Indian Sugar LX11,
No.9 Dec 12, P.102
From the table 5.9, it is found that there is an increasing trend in 2002-03
and then there is a decline during the next two years. The highest ratio of nearly 1.5
was recorded in the year 2011-12. Another perspective is viewing, sugar production
per hectare as a percentage of All India performance. Table 5.10 provides the
Tamilnadu figures as a percentage of All India sugar production.
YearProduction/ Hectare
(in tonnes) Year to Year Ratio
2002-03 6.30 1.14
2003-04 4.80 0.76
2004-05 4.78 1.00
2005-06 6.38 1.33
2006-07 6.49 1.02
2007-08 6.05 0.93
2008-09 5.17 0.85
2009-10 4.37 0.85
2010-11 5.49 1.26
2011-12 8.32 1.52
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Table 5.10
Sugar Production / hectare as percentage of All India
Year Tamilnadu (in tonnes) All India (in %)
2002-03 6.30 141
2003-04 4.80 140
2004-05 4.78 138
2005-06 6.38 139
2006-07 6.49 118
2007-08 6.05 116
2008-09 5.17 157
2009-10 4.37 96
2010-11 5.49 110
2011-12 8.32 161
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.70 &
Indian Sugar LX11., No.9 Dec,12, P.102
As percentage of All India per hectare sugar production Tamilnadu's
production is significant except in the year 2007-08. In the years 2002-03 and 2005-
06 the percentage figure stood nearly at 140 and then there is a decline during next
four years. However, it picked up in 2008-09 but again fell down in the year 2009-10.
The ratio was in the peak of 161 percent at the end of the study period.
5.5 Sugar recovery in Co-operative sugar mills
Qualitative performance may be looked into as another measure of operation.
In this regard, the sugar recovery percentage is analyzed. At the outset, sugar
recovery percentage is studied in the following table 5.11.
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Table 5.11
Average sugar recovery in Tamilnadu
Year Co-operative Recovery (in %)
2002-03 9.88
2003-04 9.92
2004-05 9.64
2005-06 9.24
2006-07 9.25
2007-08 9.32
2008-09 9.62
2009-10 8.94
2010-11 9.09
2011-12 9.35 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.67
Table 5.11 depicts year wise average sugar recovery in Tamilnadu. After a
slight increase in 2003-04 there is a regular fall in sugar recovery but still the rate of
decline is slow. However, it picked up in 2008-09 but again it fell down in the next
year. Comparison of average sugar recovery is undertaken by a study of
corresponding figures in other states. This will give an idea of qualitative
performance of Tamilnadu objectively. Table 5.12 provides information on average
sugar recovery in other states.
Table 5.12
State wise average sugar recovery (in percentage)
Year AP Gujarat Karnataka Maharastra TN UP
2002-03 10.10 10.58 10.79 11.64 9.88 9.53
2003-04 10.31 10.93 10.19 10.92 9.92 9.82
2004-05 10.65 10.76 10.11 11.39 9.64 9.79
2005-06 10.05 10.82 10.82 11.68 9.24 9.51
2006-07 9.70 10.64 10.57 11.39 9.25 9.47
2007-08 10.12 10.67 10.87 11.92 9.32 9.79
2008-09 9.89 10.72 10.28 11.44 9.62 8.94
2009-10 9.28 10.53 10.67 11.51 8.94 9.13
2010-11 9.75 9.99 10.91 11.29 9.09 9.14
2011-12 9.79 10.61 11.14 11.65 9.35 9.07
Source: Co-operative Sugar, Oct.2011, Vol.43, No.2, P.67& Dec.2012, Vol.44.No.4, P.83
83
Maharashtra has achieved the highest average sugar recovery percentage.
Tamilnadu's figure in this respect oscillates between 9 and 10. But the percentage of
Maharashtra is between 10.92 and 11.92. Andhra Pradesh and Uttar Pradesh have
registered a high recovery of 9 to 10 percent and Karnataka also recovers 9 to 10
percent. Gujarat and Karnataka also recovers 10 to 11 percent. Average sugar
recovery may be compared to corresponding All India sugar recovery. The relevant
information is explored in the table 5.13.
Table 5.13
Average sugar recovery in Tamilnadu and All India (in percentage)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.83
Average sugar recovery of Tamilnadu is less than that of corresponding All
India figure. The Tamilnadu rate as percentage of All India level is around 90
percent. The average sugar recovery of Tamilnadu may be examined for trends by
calculating the year to year ratio in the table 5.14.
YearCo-operative
Recovery in TN All India
All India
(in %)
2002-03 9.88 10.36 95.37
2003-04 9.92 10.22 97.06
2004-05 9.64 10.17 94.79
2005-06 9.24 10.21 90.50
2006-07 9.25 10.16 91.04
2007-08 9.32 10.55 88.34
2008-09 9.62 10.03 95.91
2009-10 8.94 10.19 87.73
2010-11 9.09 10.17 89.38
2011-12 9.35 10.25 91.22
84
Table 5.14
Average sugar recovery in Tamilnadu
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.84
Year to year ratio indicates an increasing trend from 2006-07 to 2008-09 and
next year slightly declines and for subsequent three years it shows steady increasing
trend over the years from 2006-07.
5.6 Capacity Utilization
Another angle from which operational efficiency can be gauged is capacity
utilization. It provides a basis for assessing the potential capacity and how far that
capacity has been utilized. Under-utilization reveals a condition where enough
quantum of work is not turned out. The quantitative deficiency may be a measure of
poor operational performance if other collateral evidence is available. Table 5.15
gives the information on capacity utilization in Tamilnadu.
YearAverage sugar
Recovery (in %)
Year to Year
Ratio
2002-03 9.88 1.03
2003-04 9.92 1.00
2004-05 9.64 0.97
2005-06 9.24 0.96
2006-07 9.25 1.00
2007-08 9.32 1.01
2008-09 9.62 1.03
2009-10 8.94 0.93
2010-11 9.09 1.02
2011-12 9.35 1.03
85
Table 5.15
Capacity utilization of sugar production in Co-operative sugar mills, Tamilnadu
Year Capacity (in lakh tonnes) Capacity Utilization (in %)
2002-03 16.65 81
2003-04 9.28 43
2004-05 11.49 49
2005-06 23.19 91
2006-07 27.45 129
2007-08 22.97 97
2008-09 16.61 78
2009-10 14.33 54
2010-11 20.31 66
2011-12 25.46 60 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.84
Capacity utilization attained a peak in the year 2006-07 at about 129% and
thereafter it tended to decline in the subsequent years. It reached to a decline of 60
percent at the end of the study period.
Table 5.16
Capacity utilization - Comparison of Tamilnadu with other States
Year AP Gujarat Karnataka Maharastra TN UP
2002-03 N.A N.A N.A N.A 81 N.A
2003-04 N.A N.A N.A N.A 43 N.A
2004-05 N.A N.A N.A N.A 49 N.A
2005-06 92 101 102 72 91 82
2006-07 138 132 146 125 129 117
2007-08 102 127 118 122 97 86
2008-09 48 94 59 62 78 44
2009-10 43 111 97 93 54 40
2010-11 70 115 117 114 66 62
2011-12 77 85 83 99 60 80 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.72
Table 5.16 provides the information of capacity utilization comparison of
Tamilnadu with other states. In all the states capacity utilization has been fluctuating.
Peak performance was during the year 2006-07 in all the states indicating a surplus
sugarcane production. Capacity utilization of Tamilnadu compared at All India level
is given in the table 5.17.
86
Table 5.17
Comparison of capacity utilization in Tamilnadu and All India level
YearCapacity Utilization (in %) Capacity utilization of
Tamilnadu as % of All India Tamilnadu All India
2002-03 81 91.01 89
2003-04 43 53.09 81
2004-05 49 113.95 43
2005-06 91 185.71 49
2006-07 129 141.76 91
2007-08 97 75.19 129
2008-09 78 80.41 97
2009-10 54 69.23 78
2010-11 66 122.22 54
2011-12 60 90.91 66 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.84
Table 5.17 shows the capacity utilization of Tamilnadu, it recorded a highest
percentage of 129 during 2006-07 and lowest percentage of 43 during 2003-04 in the
study period. As far as All India is concerned, high percentage of 185.71 is recorded
during 2005-06 and lowest percentage of 53.09 is recorded during 2003-04. There
was a setback in 2006-07 at All India level and declines in the subsequent years. To
trace the trend in capacity utilization values, ratios were calculated in the table 5.18.
Table 5.18
Year to year ratio of Capacity utilization in Tamilnadu
YearCo-operative Sector
capacity utilization
Year to Year
Percentage
2002-03 91.01 -
2003-04 53.09 58.33
2004-05 113.95 214.66
2005-06 185.71 162.97
2006-07 141.76 76.33
2007-08 75.19 53.04
2008-09 80.41 106.94
2009-10 69.23 86.09
2010-11 122.22 176.54
2011-12 90.91 74.38Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.84
87
Year to year percentage shows a sudden downward trend in 2003-04, but has
come up in the years 2004-05, 2005-06 and thereafter the trend declines for the
subsequent two years. It improved in 2008-09 and 2010-11. In 2009-10 and 2011-12
it again came down.
5.7 Operational performance of Co-operative sugar mills
Comparison of performance of Co-operative sector is another angle of
measuring physical efficiency. Average recovery of sugar in Co-operative sugar mills
in Tamilnadu expressed in percentages are displayed in table 5.19.
Table 5.19
Performance of Co-operative Sugar Mills, Tamilnadu
YearSugar Production of
Co-operative sector
Average Sugar
Recovery (in %)
2002-03 4.51 9.96
2003-04 2.32 9.88
2004-05 2.54 9.79
2005-06 4.99 9.38
2006-07 7.03 9.25
2007-08 5.30 9.35
2008-09 4.27 10.00
2009-10 2.92 9.13
2010-11 3.60 9.15
2011-12 3.99 9.10 Source: Co-operative Sugar,Oct.2011,Vol.43,No.2 P.69 & Dec.2012,Vol.44.No.4, .85
It is evident from the table 5.19 that production of sugar in Co-operative sugar
mills is fluctuating. As for sugar recovery percentage, it exhibits a similar trend in
these sectors maintaining the same level of 9 to 10 percent. This is again indicative of
market conditions and not individual sector aberrations.
88
5.8 Statistical Analysis and interpretation
This section is explicitly devoted to analyze and review the operational
performance of Co-operative sugar mills, these analyses have provided a general
review as such. In order to measure the operational performance with the help of few
hypotheses, suitable statistical techniques and tools have been employed and explored
as follows.
5.8.1 Study on area under sugarcane, cane production, yield, number of
sugar mills and cane crushed
Table 5.20
Area under sugarcane, cane production, yield, number of mills and cane crushed
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.72
Table 5.20 illustrates the area under sugarcane and production of sugarcane.
The area under sugarcane during the study period have covered an average of around
45,08,000 hectares wherein it has moved between 45,20,000 hectares to 50,85,000
hectares during the study period. The growth rate is around 2.07 on an average and the
Year
Area
un
der
Su
ga
rca
ne
(0
00
’to
nn
es)
Gro
wth
Ra
te
Pro
du
ctio
no
f
Su
ga
rca
ne
Gro
wth
rate
Yie
ldo
f
sug
ar
ca
ne
(per
hecta
re)
Gro
wth
rate
Nu
mb
er
of
Mil
ls
ino
per
ati
on
Gro
wth
rate
To
tal
ca
ne
cru
shed
Gro
wth
rate
2002-03 4520 - 287383 - 63.60 - 453 - 194365 -
2003-04 3938 -12.88 233862 -18.62 59.40 -6.60 422 -6.84 132511 -31.82
2004-05 3662 -7.01 237088 1.38 64.80 9.09 400 -5.21 124772 -5.84
2005-06 4201 14.72 281172 18.59 66.90 3.24 455 13.75 188672 51.21
2006-07 5151 22.61 355520 26.44 69.00 3.14 504 10.77 279295 48.03
2007-08 5055 -1.86 348188 -2.06 68.90 -0.14 516 2.38 249906 -10.52
2008-09 4415 -12.66 285029 -18.14 64.60 -6.24 489 -5.23 144983 -41.98
2009-10 4175 -5.44 292302 2.55 70.00 8.36 490 0.20 185548 27.98
2010-11 4886 17.03 342382 17.13 70.10 0.14 527 7.55 239807 29.24
2011-12 5085 4.07 357667 4.46 70.30 0.29 529 0.38 256975 7.16
Average 4508.8 2.07 302059 3.53 66.76 1.25 478.50 1.97 199683 8.16
Correlation 0.971** 0.643*
89
movement of this growth is fluctuated. But overall growth is positive. The production
of sugarcane has also moved in the same direction with an average of 30,20,59,000
tonnes. The movements ranges between 28,73,83,000 tonnes to 35,76,67,000 tonnes
during the study period there are up and down movement with the average growth of
3.53, which again illustrates a positive movement of operational performance. The
correlation between area under sugarcane and production of sugarcane generated the
relationship of 0.971(97.1%) which pictures that the operational performance between
sugarcane cultivation and sugarcane production resulted in positive.
Table 5.20 highlights the operational performance of yield of sugarcane per
hectare and number of mills in operation and as well as total cane crushed during the
study period. The average yield of sugarcane per hectare is 66.76 tonnes. The
correlation analysis between area of sugarcane and yield is 0.64 which shows (64%)
relationship between them. The correlation illustrates a reasonable operational
performance between them wherein, the 0.64 correlation indicated the good
association between area under cultivation and yield. The average growth of
sugarcane per hectare during the study period is around 1.25 which is positive in
nature.
The number of mills during the study period increased from 453 to 529 with
an average of 478, where in it has achieved the growth rate of 1.97 which is indicative
of reasonable operational growth rate performance. The total cane crushed during the
study period moved between 19,43,65,000 tonnes to 25,69,75,000 tonnes with an
average of 19,96,83,000 tonnes and a growth rate of 8.16. This growth rate indicates a
very favorable operative performance. The study of sugar yield, number of mills and
cane crushed has achieved positive favorable growth rate performance along with a
90
positive correlation of 0.97 between area under sugarcane and production of
sugarcane.
5.8.2 Study on total sugar production and recovery of sugar in Co-operative
sugar mills
Table 5.21 illustrates the total sugar produced and recovery of sugar. Growth
rates of sugar produced and sugar recovery are also displayed.
Table 5.21
Sugar produced and sugar recovery in co-operative sugar mills
YearSugar Produced
( lakh tonnes)
Growth
Rate
Sugar
recovery
Growth
rate
2002-03 20145 - 10.36 -
2003-04 13546 -32.76 10.22 -1.35
2004-05 12690 -6.32 10.17 -0.49
2005-06 19267 51.83 10.21 0.39
2006-07 28367 47.23 10.16 -0.49
2007-08 26357 -7.09 10.55 3.84
2008-09 14539 -44.84 10.03 -4.93
2009-10 18912 30.08 10.19 1.60
2010-11 24394 28.99 10.17 -0.20
2011-12 26343 7.99 10.25 0.79
Average 20456 8.35 10.23 -0.09
Correlation 0.416 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.68
The total sugar produced during the study period is in the range of 20,145 lakh
tones to 26,343 lakh tones with an average of 20,456 lakh tones. The growth rate of
sugar is around 8.35 which indicates a favorable operational performance of sugar
production during the study period. The sugar recovery during the study period is
10.36 to 10.25 with an average of 10.23 which indicates minimal positive movements.
This has been verified with average growth rate of sugar recovery which shows a
decline of -9 per cent during the study period. Sugar production has yielded a
favorable operational performance, but the sugar recovery performance growth rate is
91
very minimal. The relationship between sugar production and sugar recovery is 0.416,
which is not significant at 5% level.
5.8.3 Performance review of area under sugar cane in Tamilnadu and All India
In this study, the Tamilnadu sugarcane growth rate along with All India growth
rate has been appraised. Table 5.22 illustrates the area under sugarcane and production
of sugarcane in Tamilnadu and All India.
Table 5.22
Area under sugarcane in Tamilnadu and All India
Year
Area under
Sugarcane in TN
(000’ hectares)
Growth
Rate
Area under sugarcane
in All India
(000’ hectares)
Growth
rate
2002-03 262 - 4520 -
2003-04 192 -26.72 3938 -12.88
2004-05 232 20.83 3662 -7.01
2005-06 335 44.40 4201 14.72
2006-07 391 16.72 5151 22.61
2007-08 352 -9.97 5055 -1.86
2008-09 309 -12.22 4415 -12.66
2009-10 293 -5.18 4175 -5.44
2010-11 316 7.85 4886 17.03
2011-12 382 20.89 5085 4.07
Average 306.40 6.29 4,508.80 2.07
Correlation 0.834** 0.631Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.68-70
** significant at 1% level
The Tamilnadu, sugarcane cultivation takes place in around 3,06,400 hectares
as an average with a range bound or 2,62,000 hectares, 3,82,000 hectares. The growth
rate is around an average of 6.29 which reveals a favourable performance of sugarcane
area under cultivation while comparing Tamilnadu's performance with All India. The
average All India sugarcane cultivation is 45,08,000 hectares with a movement from
45,20,000 hectares to 50,85,000 hectares, the average growth rate is 207 per cent, the
growth rate comparison between Tamilnadu and All India under sugarcane area under
92
cultivation. Tamilnadu shows better operational performance in terms of growth. The
correlation between Tamilnadu and All India has yielded a performance of 83.4 per
cent in terms of sugarcane cultivation, which is significant at 1% level and in the same
manner the growth rate performance between these two has achieved a correlation of
63.1 per cent, but it is not significant. It can be observed that the comparative study of
area under sugarcane between Tamilnadu and All India has identified that Tamilnadu
has better sugarcane area than All India sugarcane performance.
5.8.4 Study of sugarcane between Tamilnadu and All India
This table 5.23 illustrates the comparative performance between Tamilnadu
and All India performance.
Table 5.23
Production of Sugarcane in Tamilnadu and All India (in 000’ tonnes)
Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.68-71
**significant at 1% level
The average production of sugarcane is around 3,15,60,000 tonnes which has
moved between 2,41,65,000 tonnes and 3,92,84,000 tonnes. Tamilnadu has achieved
better growth rate of 8.00 which reveals a favourable operational performance. The
average All India production of sugarcane is around 30,20,59,000 tonnes which has
Yearproduction in
Tamilnadu
Growth
Rate
Production in
All India
Growth
rate
2002-03 24165 - 287383 -
2003-04 17656 -26.94 233862 -18.62
2004-05 23396 32.51 237088 1.38
2005-06 35107 50.06 281172 18.59
2006-07 41124 17.14 355520 26.44
2007-08 38071 -7.42 348188 -2.06
2008-09 32804 -13.83 285029 -18.14
2009-10 29746 -9.32 292302 2.55
2010-11 34252 15.15 342382 17.13
2011-12 39284 14.69 357667 4.46
Average 31560.5 8.00 302059.3 3.53
Correlation 0.884** 0.738**
93
moved between 28,73,83,000 and 35,76,67,000 tonnes. The growth rate is around
3.53. In this study also the growth performance is better for Tamilnadu when
compared with All India. The study of correlation between Tamilnadu and All India
has achieved 88.4 per cent and correlation between them in terms of growth
performance is 73.8 per cent which highlights positive movements between them. The
comparative study analysis between Tamilnadu and All India reveals that Tamilnadu
has better operational performance and the correlation analysis identifies the positive
correlation between Tamilnadu and All India in terms of sugarcane production.
5.8.5 Yield of sugarcane in Tamilnadu and All India
Table 5.24 illustrates the comparative performance of sugarcane yield between
Tamilnadu and All India.
Table 5.24
Yield of Sugarcane in Tamilnadu and All India (in 000’ tonnes)
Source: Co-operative Sugar, Dec.2012, Vol.lx11.No.4, P.104
**significant at 1% level
The sugarcane yield in Tamilnadu with an average 1,01,000 tonnes moves
between 92 lakhs to 103 lakhs. It has achieved a growth of 132 per cent which is
Year
Sugarcane
Yield in
TN
Growth
Rate
Sugarcane
Yield in
All India
Growth
rate
2002-03 92.40 - 63.60 -
2003-04 91.90 -0.54 59.40 -6.60
2004-05 100.80 9.68 64.80 9.09
2005-06 104.70 3.87 66.90 3.24
2006-07 105.10 0.38 69.00 3.14
2007-08 107.60 2.38 68.90 -0.14
2008-09 99.70 -7.34 64.50 -6.39
2009-10 101.40 1.71 70.00 8.53
2010-11 108.40 6.90 70.10 0.14
2011-12 102.80 -5.17 70.30 0.29
Average 101.48 1.32 66.75 1.25
Correlation 0.837** 0.637*
94
reasonably the All India performance of 67 lakh tonnes with a movement in between
63,60,000 to 70,30,000 tonnes. The growth is with an average of 125 per cent. The
comparative performance reveals that Tamilnadu has better yield of sugarcane when
compared to All India yield of sugarcane. The correlation between yield of sugarcane
between Tamilnadu and All India is 83.7 per cent, the growth rate operational
performance of sugarcane yield between Tamilnadu and All India is 63.7 per cent
which is positive and favourable of operational performance between them.
5.8.6 Comparison of sugar recovery between Co-operative sugar mills in
Tamilnadu and All India
The study on sugar recovery and performance between Co-operative sugar
mills in Tamilnadu and its total sectorial performance is presented in the table 5.25
and along with this All India performance is presented for comparative review.
Table 5.25
Average sugar recovery in Co-operative sugar mills of Tamilnadu and All India
TAMILNADU ( in %) ALL INDIA (in %)
Yea
r
Co
-
op
era
tiv
e
Sec
tor
Gro
wth
Ra
te
To
tal
Gro
wth
rate
Co
-
op
era
tiv
e
Sec
tor
Gro
wth
rate
To
tal
Gro
wth
rate
2002-03 9.96 - 9.88 - 10.86 - 10.36 -
2003-04 9.88 -0.80 9.92 0.40 10.53 -3.04 10.22 -1.35
2004-05 9.79 -0.91 9.64 -2.82 10.58 0.47 10.17 -0.49
2005-06 9.38 -4.19 9.24 -4.15 10.88 2.84 10.21 0.39
2006-07 9.25 -1.39 9.25 0.11 10.70 -1.65 10.16 -0.49
2007-08 9.35 1.08 9.32 0.76 11.20 4.67 10.55 3.84
2008-09 10.00 6.95 9.62 3.22 10.85 -3.13 10.03 -4.93
2009-10 9.13 -8.70 8.94 -7.07 10.98 1.20 10.19 1.60
2010-11 9.15 0.22 9.09 1.68 10.72 -2.37 10.17 -0.20
2011-12 9.10 -0.55 9.35 2.86 10.94 2.05 10.25 0.79
Average 9.50 -0.92 9.43 -0.56 10.82 0.12 10.23 -0.09
Correlation -0.433 -0.385 Source: Co-operative Sugar, Dec.2012, Vol.44.No.4, P.83
Table 5.25 shows the average recovery of sugar percent in Co-operative sugar
mills in Tamilnadu and All India. The sugar recovery of Co-operative sector during
95
the study period is 9.50 and its growth is 0.92 per cent wherein the negative growth is
due to variation of growth performance during the study period. The Tamilnadu's total
sectoral performance in terms of sugar recovery amounts to 9.43 and the growth
performance of 0.56 per cent indicates that the sugar recovery performance between
Co-operative sector and other sectors are subject to fluctuations. On the other hand
Co-operative All India performance is 10.82 with an average growth of 0.12 per cent.
In the same manner, the All India total sectoral performance is around 10.23 with a
growth negative performance of 0.09 per cent. The comparative recovery performance
between Tamilnadu and All India performance is much better than Tamilnadu. The
correlation analysis between Tamilnadu Co-operative sugar mills and All India Co-
operative sugar mills achieved the point of 38.5 per cent and in the same manner total
sectoral performance between Tamilnadu and All India in terms of sugar recovery is
43.3 per cent which indicates a positive movement between them but the movement is
not significant.
It can be observed that the sugar recovery performance between Tamilnadu
and All India in terms of Co-operative sector performance along with total sectoral
performance indicates that All India sugar recovery performance is much better than
Tamilnadu sugar recovery performance. The correlation analysis between Tamilnadu
and All India has yielded a positive correlation between them.
5.8.7 Association between sugarcane production and cane crushed
Testing the significant association between sugarcane production and cane
crushed during the study period, simple regression analysis has been performed. The
following hypothesis is framed.
96
Null Hypothesis H01: There is no significant association between sugarcane
production and cane crushed during the study period.
Simple Regression analysis is performed by taking sugar production as
dependent variable and Cane crushed as independent variable. The simple regression
is of the form Y = a + bx is fit to ensure the relationship between the dependent
variable and independent variable.
Table 5.26
Relationship between sugar production and Cane crushed
R2
Adjusted R2 F-value p-value Beta t-value
Constant
0.449 0.380 6.517* .034
17661.37 3.060*
Cane
Crushed0.289 2.553*
* significant at 5% level
It is observed from the table 5.26, the model fit “F” value is 6.517 is
significant, the null hypothesis is rejected at 5% level. The Coefficient of
determination R2 is 0.449, which shows 44.9% of the variability in sugar production is
caused by the cane crushed.
The regression equation stating the relationship between sugar production and
cane crushed is
Sugar production = 17661.37 + 0.289(Cane crushed)
The regression equation shows that cane crushed serves as a significant
predictor for sugar production and one unit increase in the cane crushed increases the
sugar production by 0.289 units during the study period. Further this shows that the
Operational performance of the sugar industry in terms of cane crushed and sugar
produced have been associated in a strong way during the study period in Tamilnadu
Co-operative sugar mills.
97
5.8.8 Comparison of Co-operative sugar mills with All India sugar mills
To test whether there is significant difference in terms of growth rate of
operational performance between Tamilnadu Co-operative sugar mills and All India
sugar mills, independent samples t- test is applied to test the difference in growth
rates, following null hypothesis is framed.
Null Hypothesis H02: There is no significant difference in operational
performance of growth rate between Tamilnadu Co-operative sugar mills and
All India sugar mills with regard to area under sugar cane.
Table 5.27
t-test for comparison of growth rate between Tamilnadu Co-operative
sugar mills and All India mills
Mean S.D t -value p - value
Tamilnadu Co-
operative sugar mills 6.28 21.84
0.496 0.627
All India sugar mills 2.06 13.24
Table 5.27, indicates that there is no significant difference in operational
performance of growth rate between Tamilnadu sugar mills and All India sugar mills
with regard to area under sugar cane, the null hypothesis H0 2 is accepted at 5% level.
It is concluded that there is an insignificant relationship of operational performance of
growth rate of area under sugarcane in Tamilnadu Co-operative sugar mills and All
India sugar mills during the study period.
98
5.8.9 Association of Sugar Production in Tamilnadu and All India
Operational performance of sugar production of Tamilnadu Co-operative
sugar mills is compared with All India sugar mills. To test the significant relationship
between sugar productions in Tamilnadu Co-operative sugar mills and All India sugar
mills, Bi-variate correlation is used and the following hypothesis is framed.
Null Hypothesis H03: There is no significant relationship between Tamilnadu Co-
operative sugar mills and All India sugar mills with regard to sugar production.
Table 5.28
Relationship between Tamilnadu Co-operative sugar mills and All India sugar
mills with regard to sugar production
All India sugar mills
Tamilnadu Co-operative
sugar mills
r = .884**
p=.001
** significant at 1% level
The correlation analysis in table 5.28 reveals that there is 88.4 per cent
relationship between Tamilnadu Co-operative sugar mills and All India sugar mills in
terms of sugar production, the null hypothesis is rejected at 1% level of significance.
Relationship for Production of sugarcane between Tamilnadu Co-operative sugar
mills and All India sugar mills shows that the contribution of sugar production in
Tamilnadu Co-operative mills is a significant at All India sugar production during the
study period.
99
5.8.10 Comparison of Co-operative sugar mills with All India sugar mills in
terms of sugar recovery
To test whether there is significant difference between Tamilnadu Co-
operative sugar mills and All India sugar mills with regard to operational performance
of sugar recovery, independent samples t- test is applied to test the difference in sugar
recovery. The following null hypothesis is framed.
Null Hypothesis H04: There is no significant difference between Tamilnadu Co-
operative sugar mills and All India sugar mills with regard to sugar recovery
Table 5.29
t-test for comparison of sugar recovery between Tamilnadu Co-operative sugar
mills and All India mills
Mean S.D t- value p – value
Tamilnadu Co-operative mills 9.42 0.327
7.164** <.001
All India sugar mills 10.23 0.139
** significant at 1% level
The results of t-test in table 5.29, reveals that there is significant difference in
the operational performance of sugar recovery between Tamilnadu Co-operative sugar
mills and All India sugar mills, the null hypothesis H04 is rejected at 1% level.
Further it is observed from the mean values of the sugar recovery rate, All India sugar
mills are performing better than the Tamilnadu Co-operative sugar mills in terms of
sugar recovery.
5.8.11 Comparison of Co-operative sugar mills with public sector sugar mills
To test whether there is significant difference between Tamilnadu Co-
operative sugar mills and Public sector sugar mills with regard to operational
100
performance of sugar recovery, independent samples t- test is applied to test the
difference in sugar recovery. The following null hypothesis is framed.
Null Hypothesis H05: There is no significant difference between Tamilnadu Co-
operative sugar mills and Public sector sugar mills with regard to sugar recovery
Table 5.30
t-test for comparison of sugar recovery between Tamilnadu Co-operative sugar
mills and Public sugar mills
Mean S.D t- value p – value
Tamilnadu Co-operative sugar
mills9.42 0.327
0.510 0.616
Public sector sugar mills 9.32 0.556
The results of t-test in table 5.30, reveals that there is no significant difference
in the operational performance of sugar recovery between Tamilnadu Co-operative
sugar mills and Public sector sugar mills, the null hypothesis H0 5 is accepted at 5%
level. This shows that the operational performance in terms of sugar recovery is
almost same in Tamilnadu Co-operative sugar mills and Public sector sugar mills.
5.9 Summary
The study of Co-operative sugar mills in terms of operational performance
reveals that the sugarcane production along with crushing and yield indicates a
positive and favorable aspect of operational performance of average sugar recovery
declines marginally coupled with capacity utilization. The performance of Co-
operative and public sector mills shows fluctuation in nature of performance wherein
the Co-operative mills has a slight edge in performance. The next chapter of this study
is devoted to identify and analyze the financial performance of Co-operative sector
sugar mills in Tamilnadu.