The centre on Wednesday hiked the minimum price that mills have to pay to sugarcane growers by ₹ 5 per quintal to ₹ 290 a quintal for 2021-22 marketing year, but ruled out any immediate increase in the selling price of sugar. The decision to increase the Fair and Remunerative Price (FRP) of sugarcane for the 2021-22 marketing year (October-September) was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA).
The government had fixed sugarcane FRP at ₹ 285 per quintal for the current 2020-21 marketing year.
Briefing the media after the Cabinet meeting, Food and Consumer Affairs Minister Piyush Goyal said the FRP has been increased to ₹ 290 per quintal for a basic recovery rate of 10 per cent. He said a premium of ₹ 2.90/quintal will be provided for each 0.1 per cent increase in recovery over and above 10 per cent.
There will be a reduction in FRP by ₹ 2.90/quintal for every 0.1 per cent decrease in recovery.
To protect interest of farmers, Mr Goyal said the government has decided that there would be no deduction where recovery is below 9.5 per cent.
Such farmers will get ₹ 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 in place of ₹ 270.75 per quintal in current sugar season 2020-21,” the minister said.
The cost of production of sugarcane for the sugar season 2021-22 is ₹ 155 per quintal. The FRP of ₹ 290 per quintal at a recovery rate of 10 per cent is higher by 87 per cent over production cost, he said, adding that sugar cane farming is more remunerative than other crops.
The decision will benefit around 5 crore sugarcane farmers and their dependents, as well as about 5 lakh workers employed in sugar mills and related ancillary activities.
When asked if the government will increase the minimum selling price (MSP) of sugar as FRP has been raised, Mr Goyal said, “Not necessarily”.
He said the government is giving a lot of support to increase sugar exports and ethanol production.
“Considering all of these factors, we do not see any reason at the present moment for increasing the (sugar) selling price,” he said, add added the sugar prices have remained stable in the domestic market.
He also said the government has ensured a “delicate balance” between the interest of farmers and consumers as well as of the industry.
The centre fixes sugar MSP, which is the floor price below which mills cannot sell the sweetener in the market. The current MSP is ₹ 31 per kg.
Mr Goyal noted sugar content recovery has been improving as farmers are using modern technology and new agricultural practices.
Talking about sugar exports, the minister said the sugar mills have contracted for export of 70 lakh tonnes in the current marketing year 2020-21, of which 55 lakh tonne have already been shipped, and the remaining 15 lakh tonne are in pipeline.
Mr Goyal said the government has been giving financial assistance to mills for increasing exports.
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