ISMA’s Proposal on Sugar Prices
On 9th October, at Ahmedabad, The Indian Sugar Mills Association (ISMA) formally approached the Central Government of India with a proposal for revising the minimum selling price of sugar, a price that has remained unchanged for multiple years. For the 2023-24 fiscal period, ISMA suggests transitioning the minimum selling price from roughly $0.55 per kg. The prevailing price hovers at approximately $0.42 per kg, maintaining its stability since 2019.
Sugarcane Pricing Framework
Adjustments have also been made in the realm of sugarcane pricing. The equitable price for sugarcane is adjusted from nearly $4.10 to $4.23 per 100 kg for the designated fiscal year. Taking cues from the Rangarajan Committee’s recommendations, ISMA emphasizes that sugar prices for each year should be 3.33 times that of the sugarcane’s fair price. Their advocacy leans towards stabilizing the present rate at $4.23 per 100 kg. Moreover, they propose that any future price amendments for sugarcane should occur only after the sugar’s minimum selling rate attains the $55 per 100 kg mark.
State-Specific Pricing Concerns
A significant concern raised by ISMA revolves around state-specific pricing. They have ardently advised states against declaring their distinct prices, as these often eclipse the prices determined centrally. Areas like Karnataka present a notable example where additional charges, primarily influenced by ethanol production revenues, pose discrepancies in the national sugarcane pricing strategy. The 2023-24 report by NITI Aayog illustrates that almost 80% of cane payments made to farmers are influenced by states with their pricing metrics. The Commission, therefore, suggests that states either relinquish their pricing or bridge the pricing gap through direct monetary interventions with the cultivators.
Production Trends and Collaborations
Over the past decade, sugarcane production metrics highlight a 20% increase, while the cultivation area observed just a 10% growth. This implies a 13% acceleration in overall sugarcane yield rates, which, in turn, led to a reduction in per unit farming expenses. ISMA contends that this cost reduction should find reflection in the Central Government’s endorsed sugarcane pricing. Further strengthening their commitment to the agrarian sector, ISMA has established a collaboration with the Sugarcane Promotion Institute in Coimbatore. This partnership aims to pioneer high-yield sugarcane variants, ensuring promising returns for the agricultural community.
As the sugar industry confronts changing economic factors, ISMA’s proposal offers a pivotal step towards aligning sugar prices with current market realities.
