| According to data from the state cane commissioner's office, only 315 khandsari units are in operation in the current sugar season (October-September) in UP as against 366 units last year. |
| However, during the same period, the number of sugar mills increased by eight to 129. |
| "The once flourishing khandsari business is now on the verge of becoming history. The state government's taxation policy and tough competition from sugar mills are the main causes of their decline," said Arun Khandelwal, member of Gur, Khandari and Grain Merchants Association, Muzaffarnagar. |
| The decline has made the situation of cane growers even worse. "When these units were operating in large numbers, farmers had another avenue to sell. Now, they are largely dependent on sugar mills," Khandelwal added. |
| About a decade ago, the state had over a thousand khandsari units functioning. |
| A medium-size khandsari unit with a crushing capacity of 1,700 quintals a day directly employs about 60 people. |
| The recovery rate of a khandsari unit is 4-4.5 per cent compared with 10 per cent for sugar mills. |
| Khandsari units have to pay a cane purchase tax of Rs 1.50 a quintal. Khandsari also attracts a value added tax (VAT) of 4 per cent and a mandi tax of 2.5 per cent. |
| While the cost of producing khandsari is higher than that of sugar owing to low recovery, it sells at a price similar or even lower than that of sugar. |
| Cane drawal by sugar mills went up from 45.15 per cent to 56.33 per cent between 2005-06 and 2006-07 whereas for khandsari units, it declined from 5 per cent to 3.08 per cent. |
| During the two seasons, khandsari production in the state declined from 270,000 tonnes to 210,000 tonnes. |
| Sugar mills can afford to buy sugarcane at high rates as they have additional revenue sources such as ethanol and cogeneration. |
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