New Delhi [India], October 14 : The Centre on Wednesday constituted a committee to examine demands for higher payments to sugarcane farmers and a revision in the minimum selling price of sugar, amid concerns over rising production costs and the financial health of sugar mills.
The committee, headed by former NITI Aayog member Professor Ramesh Chand, will review pricing issues affecting farmers and sugar mills, according to the Ministry of Consumer Affairs, Food and Public Distribution.
The move is significant as the minimum selling price of sugar, which is the lowest price at which mills can sell sugar, has remained unchanged at Rs 31 per kg since February 2019, even as sugarcane procurement costs have increased.
The committee will examine "the demand for an increase in remunerative returns to sugarcane farmers, taking into account cultivation costs and other relevant factors."
It will also examine "the demand for revision of the ex-mill Minimum Selling Price (MSP) of sugar in the context of sugar production costs, market realisations, and the financial viability of sugar mills."
The review could have implications for sugar mills' earnings and their ability to pay farmers, although no immediate change in prices has been announced.
The committee was constituted following decisions taken at a meeting between sugarcane farmers' representatives from Karnataka and Maharashtra and the Union Ministers of Agriculture and Farmers Welfare and Consumer Affairs, Food and Public Distribution.
Apart from pricing, the committee will examine sugar recovery testing and reporting systems, including "measures to ensure transparent verification of recovery."
Sugar recovery refers to the amount of sugar extracted from sugarcane and is an important factor in determining payments to farmers.
The panel will also review sugarcane weighing practices at mills and deductions made from the weight of mechanically harvested sugarcane. It will assess whether such deductions reflect actual losses and their financial impact on payments due to farmers.
The ministry said the committee will "consult all stakeholders, including farmers' representatives, sugar mill associations, state governments and other experts or organisations, as considered necessary."
The panel, which includes senior officials from the agriculture, food distribution and consumer affairs ministries, will submit its findings and specific recommendations as early as possible for government consideration.