No cut in FRP, says Piyush Goyal to sugar industry

Minister of Commerce and Railways Piyush Goyal, also responsible for the Ministry of Food and Consumer Affairs, told the sugar industry that the government will not reduce the Fair and Remunerative Price (FRP) given to farmers for sugar cane.

Instead, the industry should find a way to earn more by being more efficient and diversifying its product portfolio.

Goyal, who addressed the 86th Annual General Meeting (AGM) of the Indian Sugar Mills Association, said it was impractical to tie the purchase price of sugar cane to the achievement of the price of sugar and therefore it was not possible to reduce the FRP as it was an institutional mechanism that had been going on for many years, long before Narendra Modi’s government came to power.

Ethanol blend

He urged the industry to examine the possibility of increasing ethanol production and adding other potential products to the sugar industry portfolio.

He said it was not necessary to stop at 10 percent blending, it could go up to 20 to 30 percent, adding that Brazil had blended 70 to 80 percent ethanol into the fuel.

Production, exports

Goyal urged the sugar industry to work closely with the transportation industry as well as the government to make this happen. Goyal said the government’s decision to grant a subsidy of 6,000 yen per tonne on the export and transport for the export of 60 lakh tonnes of sugar during the current marketing year 2020-21 (October 2020 to September 2021) will help the industry liquidate excess sugar stocks.

According to him, sugar production in the current season is expected to be 20% higher than in the previous marketing year.

Cane contributions

He said the Center was in the process of releasing ₹ 5,361 crore which is owed to the industry due to export subsidies and payments for ethanol and that the funds will mainly be used to pay arrears to sugar cane producers and the rest of the amount, if all, will be deposited into the accounts of the respective factories.

The minister expressed concern about the arrears of sugar cane to farmers, especially in Uttar Pradesh, and called on the millers to get rid of them as soon as possible.

Goyal also called on the industry to do a holistic assessment to find a sustainable solution that is achievable and makes the industry efficient as well as profitable with “less stress” on the government subsidy. The minister also called on factories to educate farmers in their areas of command about the benefits of the three new agricultural laws that farmers in Punjab, Haryana and other states are protesting against in Delhi.

ISMA President Vivek Pittie said the margin above the cost of producing sugar cane is over 100% and that, along with a high sugar stock, is putting several sugar companies under pressure. financial.

He said sugar cane producers get nearly 40 percent more yield over producers of other crops whose minimum support prices are 50 to 65 percent above the cost of production.

Rachel J. Bradford