The Indian Union Cabinet has given its approval for a proposal that looks to establish an emergency sugar reserve totalling 4 million tonnes. The Fair and Remunerative Prices for sugarcane intended for the fiscal year of 2019-20 have also been approved.
The Significance of the Sugar Industry
The sugar industry, a significant agro-based enterprise, affects approximately 50 million rural sugarcane farmers’ livelihoods. An estimated 5 lakh workers are directly employed in sugar mills across the nation. Globally, India represents the world’s second-largest sugar producer, falling behind Brazil only. In addition, India outpaces all other countries in terms of sugar consumption.
The Process of Sugarcane Price Determination
Two governing bodies play pivotal roles in determining prices for sugarcane, which are the Federal Government and the State Government. The Federal or Central Government announces the Fair and Remunerative Prices (FRP), which are determined guided by the recommendations made by the Commission for Agricultural Costs and Prices (CACP). These price announcements are made by the Cabinet Committee on Economic Affairs, under the chairmanship of the Prime Minister. On the other hand, the State Advised Prices (SAP) are declared by prominent sugarcane-producing states and are typically higher than the FRP.
Commission for Agricultural Costs and Prices (CACP)
The Commission for Agricultural Costs and Prices (CACP) operates as an attached office under the Ministry of Agriculture and Farmers Welfare, functioning within Government of India’s framework. The commencement of CACP activity dates back to January 1965. Though it serves as an advising institution, its suggestions are not obligatory for the Government to consider and implement.
Sugar Industry Statistics
| Sugar Industry Parameter | Statistical Detail |
|---|---|
| Total Sugarcane Farmers | Approximately 50 million |
| Direct Employment in Sugar Mills | Around 5 lakh workers |
| Global Position in Sugar Production | Second (After Brazil) |
| Global Position in Sugar Consumption | First |
Sugarcane Pricing Determinants
The price fixation of sugarcane involves the participation and decision-making of both Central and State governments. The Central Government brings forth the Fair and Remunerative Prices after obtaining recommendations from the Commission for Agricultural Costs and Prices (CACP). These prices are announced by the Cabinet Committee on Economic Affairs, led by the Prime Minister. Conversely, the State Advised Prices are disclosed by major sugarcane-producing states and generally possess a higher rate than the FRP.
Source: PIB