The Centre on Wednesday decided to increase the minimum price sugar mills pay to sugarcane growers by Rs 10 to Rs 285 per quintal for the next marketing year starting October 2020. A decision to increase the Fair and Remunerative Price (FRP) of sugarcane for 2020-21 marketing year (October-September) was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA).
The decision is in line with the recommendation of the Commission of Agricultural Costs and Prices (CACP), a statutory body that advises the government on the pricing policy for major farm produce, they added.
The FRP, which is determined under Sugarcane (Control) Order, 1966, is the minimum price that sugar mills have to pay to sugarcane farmers. 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.
The government estimates the country’s total sugar production to be 28-29 million tonne in the current year ending next month, compared to 33.1 million tonnes during 2018-19 due to sharp fall in cane acreage in Maharashtra and Karnataka.
However, it should be noted that the sugar mills have outstanding dues of thousands of crores of rupees on farmers, which once again raises the question of the immediate benefit of increasing FRP to the farmers. With cane payment arrears to farmers crossing Rs 14,200 crore, sugar mills in Uttar Pradesh alone, the state mills have sought a cash subsidy bailout from the state government to enable them to discharge their outstanding dues.
As sugar mills become increasingly incapable to pay to the farmers, the government has recently brought various landmark reforms in the agriculture sector. With a higher farm production, India exported a significantly higher amount of agri products in the global market this year. The exports of agricultural commodities from March to June 2020 shot up by 23.24 per cent on-year to Rs 25,552.7 crores, according to the Ministry of Agriculture & Farmers Welfare.