Indian Government is reportedly planning to raise the price of sugarcane it pays to farmers by 32% to increase plantings and overcome production shortage.
As per the reports, the Food Ministry may recommend to the Cabinet a price of Rs107.76 for 100 kilograms for the next season compared with Rs81.18 paid in the last two years.
The Food Ministry will move the Union Cabinet with the Prime Ministers Economic Advisory Council (PMEAC) recommendation soon after the new Government is formed. On February 23, the Cabinet had referred the sugarcane SMP matter to PMEAC after some ministers raised their concerns over the proposed hike.
A decline in sugar production for a second sucessive year has forced India to become a net importer for the first time since 2006, and fueled a 31% rally this year in raw-sugar prices. The Indian Sugar Mills Association, a leading trade body, has been asking the Government to announce the support price to encourage farmers to plant more to help tide over a shortage.
The Commission for Agricultural Costs and Prices, which recommends support price for agricultural crops, had suggested SMP to be raised to Rs125 a quintal. Due to shortage of sugarcane, some mills in Uttar Pradesh are reported to have paid Rs 155-160 a quintal, much more than the state advisory price (SAP) of Rs140 a quintal, to buy the cane this season itself.
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