Relief measures for sugar sector under consideration, says Harshvardhan Patil
India’s sugar industry may receive relief as the government reviews demands to raise sugar MSP from ₹31 to ₹43/kg, increase ethanol procurement prices, expand cane-based ethanol allocations and ease debt burdens. Industry leaders say these measures are needed to address mounting financial stress and ₹8,000 crore in pending farmer payments.
Signs are emerging of possible relief for India’s sugar industry as the central government begins processing several long-pending demands aimed at easing financial pressure on sugar mills and supporting ethanol production, according to National Federation of Cooperative Sugar Factories Chairman Harshvardhan Patil.
Speaking in New Delhi on Tuesday, Patil said discussions are underway at the senior government level on key industry demands, including an increase in the minimum selling price (MSP) of sugar, higher procurement prices for ethanol, additional allocation for cane-based ethanol and measures to reduce financial stress on sugar factories.
Patil raised these issues during a meeting with Sanjeev Chopra, Secretary in the Ministry of Consumer Affairs, Food and Public Distribution. The follow-up comes after a delegation led by Chief Minister Devendra Fadnavis met Union Home Minister Amit Shah on May 27 to present concerns related to the sugar sector.
On ethanol, the federation argued that procurement prices have not kept pace despite a significant increase in the Fair and Remunerative Price (FRP) of sugarcane. The industry has demanded that ethanol produced from B-heavy molasses be priced at Rs 67 per litre, while ethanol produced from sugarcane juice and syrup should be fixed at Rs 72 per litre.
Patil said the ethanol blending programme was originally introduced to absorb surplus sugar and provide support to the sugar industry. However, with the share of cane-based ethanol now falling below 30%, sugar mills are not receiving the expected benefits. He urged the government to increase the allocation for cane-based ethanol and approve an additional quota to address the growing stock of unsold B-heavy molasses with mills.
The federation also called for regulation of jaggery and khandsari production to protect sugar and ethanol output. In addition, it sought relief under the ongoing one-time settlement scheme of the Sugar Development Fund (SDF), requesting at least a 50% reduction not only in penal interest but also in regular interest. Patil said such a move would encourage greater participation from sugar mills and help the government recover outstanding loans faster.
Patil also held meetings in New Delhi with senior officials from the National Cooperative Development Corporation (NCDC), the Cooperation Department and the Petroleum Ministry to discuss broader issues affecting the sugar industry.
The federation has also renewed its demand for increasing the MSP of sugar. At present, the minimum selling price stands at Rs 31 per kg. According to Patil, since the last revision in MSP, the FRP of sugarcane has increased by nearly 29.5%, while sugar production costs have climbed to around Rs 42 per kg.
As a result, many sugar factories across the country are facing financial strain and pending payments to sugarcane farmers have crossed Rs 8,000 crore. In this backdrop, the federation has urged the Centre to raise sugar MSP to Rs 43 per kg.
Separately, the federation proposed setting up an inter-ministerial coordination group comprising representatives from all concerned ministries and industry bodies to ensure better policy coordination across the sugar, sugarcane and ethanol sectors.
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Source : ChiniMandi
