The Union Government should fix a minimum factory gate price for sugar and it should be linked to the Fair and Remunerative Price for sugarcane, according to industry sources. Such a move would help sugar mills pay the FRP to the farmers.
For the current sugar season (October to September), the country is expected to see about 32 million tonnes of sugar production. Prices have been falling for the past 7-8 months, though there has been a slight improvement in prices recently, the sources said. Cane price arrears for farmers have crossed ₹22,000 crore.
So the minimum sugar price should be linked to the FRP that the government fixes every year. Maharashtra and Karnataka adopt a formula where the cane price payable by the sugar mills is 75 % of the revenue realised from sugar prices. The Centre should adopt a similar system, the sources said.
Since the grades of sugar produced across the country differ, the minimum prices for sugar should also depend on the grade and the location. There should be provisions to ensure compliance of the minimum sale price. “The government should take a quick decision on these,” the sources said.
The Indian Sugar Mills’ Association had also written to the government in this regard. It suggested two minimum prices — one for the grade of sugar made by the mills in the south and west and another for the sugar produced by the mills in the northern States.