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The sugar industry has demanded that the Centre must accept its proposal to hike the Minimum Selling Price (MSP) of sugar from ₹31 per kg to ₹34.50 to ensure that sugar mills are able to pay farmers on time and start the next crushing season.
Members of the National Federation of Cooperative Sugar Factories (NFCSF) have been insisting that the government has increased Fair and Remunerative Price (FRP) regularly but not the MSP.
The Centre fixes the FRP of sugarcane for every sugar season based on the recommendation of the Commission for Agricultural Costs and Prices (CACP) in consultation with States and other stakeholders having regard to various factors including input cost of production of sugarcane. As per the report of CACP for sugar season 2020-21, all India projected A2 + FL cost of production ( Actual paid out cost plus imputed value of family labour) of sugarcane was fixed at ₹159 per quintal.
On the recommendations of CACP, the government fixed the FRP of sugarcane for sugar season 2020-21 at ₹285 per quintal for a basic recovery rate of 10 per cent providing a premium of ₹2.85/ quintal for each 0.1 per cent increase in recovery over and above 10 per cent. ln respect of those mills whose recovery is below 10 per cent but above 9.5 per cent, FRP was reduced by ₹2.85/ quintal for every 0.1 percentage point decline in sugar recovery below 10 per cent. The government decided that there shall not be any deduction in the case of mills where recovery is below 9.5 per cent and such farmers will get ₹270.75 per quintal for sugarcane.
“Despite higher FRP, low recovery and less demand in the market, mills have paid almost all dues to farmers. But now it will not possible for us to start next season unless the government hikes MSP. Once the MSP is hiked, we have a hope to get additional loans from banks as the price of sugar stock will go up,” said one of the directors of the sugar mills in Sangli.
According to NFCSF, many mills would start crushing season early owing to a glut in sugarcane production and the government must take a call on the MSP hike without any delay.
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