Table of Contents
CABINET APPROVES INTERVENTIONS TO DEAL WITH THE CURRENT CRISIS IN THE SUGAR SECTOR
•Fair Remunerative Price (FRP) – Only Sugarcane
•Between 2010-11 and 2017-18, despite excess production in most years, the FRP for cane has
nearly doubled from Rs 130/quintal to Rs 255/quintal.
•MSP (minimum support price) 23 crops
STATE ADMINISTERED PRICE
•SAP -When the state government issues its SAP then the mills in the state are bound to pay by that amount only.
FIXATION OF MINIMUM SELLING PRICE OF WHITE SUGAR
With sugar mills facing a liquidity crisis, the government has decided to fix the minimum price
of refined sugar at ₹29/kg.
NOTES
•India is world’s second largest sugar producer after Brazil with production of around 20-25 million tonnes of sugar every year.
• The sugar production was 25.13 million tonnes in 2015- 16 sugar season (sugar season ~ October to September); 20.2 million tonnes in 2016-17, 25 million tonnes in 2017-18 and is expected to be around 30 million tonnes in 2018-19.
NOTES
• Excess production during the current Sugar Season and indication of higher production in the ensuing Sugar Season has been continuously depressing the market
price of sugar.
•Due to the depressed market sentiments and crash in sugar prices, the liquidity position of the sugar mills has been adversely affected leading to accumulation of cane price dues which has already reached to an alarming level of more than Rs.22000 crore.
GOVERNMENT’S ACTIONS
In order to improve the problem of liquidity of sugar mills resulting in accumulation of huge cane price arrears of farmers, the Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the following measures involving total amount of about Rs. 7000 crore.
NOTES
•Of the Rs 7,000 crore package, only Rs 1,175 crore (17% of the total) has been allocated to pay
the pending dues of sugarcane farmers.
•The rest, worth Rs 5,732 crore, is aimed towards providing financial assistance to sugar mills in order to augment capacity by investing in infrastructure.
NOTES
According to industry estimates, the cost of producing sugar is around Rs 36 per kilogram,
and the government’s setting of a minimum price of Rs 29 per kilogram fails to address the
problem.
In order to stabilize sugar production at reasonable level with a view to improve the liquidity position of the mills thereby enabling them to clear the cane price arrears of farmers, Central
Government has taken the following steps in past four months ETHANOL
Facilitate a ₹4,440 crore loan scheme to help mills produce ethanol from surplus
cane.
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