New Delhi : The government on Wednesday raised the minimum price sugar mills pay to the cane growers by Rs 20 per quintal to Rs 275 per quintal for the 2018-19 season starting from October 1.
The fair and remunerative price (FRP) of sugarcane is Rs 255 per quintal for the 2017-18 marketing year (October-September).
The FPR will be Rs 261.25 per quintal for the next season if the recovery is below 9.5 per cent.
A decision in this regard was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi.
Law Minister Ravi Shankar Prasad, who briefed the media on the Cabinet decisions, said this rate is 77.42 per cent over and above the sugarcane production cost of Rs 155 per quintal for the season and thus it meets the government’s promise of a return of more than 50 per cent to the farmers over their cost.
The new price below which the sugar mills cannot buy the sugarcane is for a basic recovery rate of 10 per cent, with a premium of Rs 2.75 per quintal on each 0.1 per cent increase in the recovery.
Taking into account the likely sugarcane output in 2018-19, total remittance to the sugarcane farmers will be more than Rs 83,000 crore, he added.
The increase is also likely to result in states like Uttar Pradesh, which do not follow the centrally-announced FRP, raising their own advisory prices.
Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called ‘state advisory prices’ (SAPs), which are usually higher than the Centre’s FRP.
With a view to protect the farmers’ interests, Prasad said the mills will have to pay Rs 261.25 per quintal where the recovery is below 9.5 per cent without any kind of deduction. He said the government will ensure that the sugarcane growers get their dues in time.
He said the Food and Consumer Affairs Ministry will also raise the minimum selling price of sugar at the mill gate fixed at Rs 29 per kilo to give some relief to the sugar mills.
Officials said the government is particularly concerned about the issues of the sugar sector since it is an important agro-based sector impacting the livelihood of some 5 crore farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in farm labour and transportation.
The FRP is determined on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultations with state governments and other stakeholders. The CACP determines the FRP taking into account various factors such as cost of production, overall demand-supply situation, domestic and international prices, inter-crop price parity, trade prices of primary by-products and likely impact on the general price level and resource use efficiency.
Claiming that series of measures adopted by the government to enable the sugar mills clear the cane prices have shown the effect, the officials said the farmers’ arrears that had peaked to Rs 23,232 crore on May 21, 2018 have come down to Rs 17,824 crore.
Reacting to the development, Indian Sugar Mills Association (ISMA) Director General Abinsh Verma said mills are unable to pay this year’s FRP and the increase in its rate for next year would be “more unaffordable” unless concrete and focussed steps are taken to help improve ex-mill sugar prices to at least Rs 35 kg.
