Context:

• Sugar mills are lobbying with the government for an increase in the minimum selling price (MSP) of sugar to Rs. 34.50 a kg from Rs. 31 to help them clear payment arrears to sugarcane farmers.
• According to the Indian Sugar Mills Association, production rose 20% in the first five months of the season which started in September, putting further pressure on falling prices.

Details:

• By February-end, 502 mills across the country had produced almost 234 lakh tonnes of sugar, in comparison to 195 lakh tonnes produced by 453 mills during the corresponding period last year.
• Production has shot up in Maharashtra and Karnataka, though it is slightly lower in Uttar Pradesh than last year’s, according to ISMA data.
• The prices are almost Rs. 80-100 a quintal less than what was prevailing a year ago during the corresponding period.

Pricing policy for sugarcane:

• The pricing of sugarcane is governed by the statutory provisions of the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act (ECA), 1955.
• Prior to the 2009-10 sugar season, the Central Government was fixing the Statutory Minimum Price (SMP) of sugarcane and farmers were entitled to share profits of a sugar mill on 50:50 basis.
• As this sharing of profits remained virtually unimplemented, the Sugarcane (Control) Order, 1966 was amended in October, 2009 and the concept of SMP was replaced by the Fair and Remunerative Price (FRP) of sugarcane.
• A new clause ‘reasonable margins for growers of sugarcane on account of risk and profits’ was inserted as an additional factor for working out FRP and this was made effective from the 2009-10 sugar season.
• States also announce a price called the State Advisory Price (SAP), which is usually higher than the SMP.

https://www.thehindu.com/todays-paper/tp-national/sugar-mills-seek-higher-msp-for-their-produce/article33984528.ece

Download PDF