March 13, 2002

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GOVT. FOR SUGARCANE PRICING ON ECONOMIC CONSIDERATIONS

   Determination of sugarcane price should be on relevant economic considerations and State Governments should be weaned away from declaring State Advised Prices (SAPs) which do not seem to be based on purely economic factors; observed Shri R.D. Kapur, Secretary, Department of Food and Public Distribution. Inaugurating a seminar on pricing of sugarcane here today, he said that the Commission for Agricultural Costs and Prices (CACP) could compute zone-wise SMPs taking into account the sugarcane growers’ share out of the estimated surplus that would be generated by the sugar mills.

    Referring to the various recommendations of the High-Powered Committee on Sugar Industry as included in its report submitted in April, 1998 Shri Kapur said that as recommended by the Committee the practice of Statutory Minimum Price (SMP) of sugarcane would be continued even under the system of complete decontrol of sugar prices. Government has agreed to the recommendation of the Committee that the share of the sugarcane growers should be fixed on a rational basis and the determination of this percentage would be studied by the CACP. However, the basis of fixation of growers’ share as given in the report would be considered by the Commission along with other alternatives that the CACP might consider appropriate; the Secretary said.

    Government will be introducing the Bill for Amending the Sugarcane Development Fund Act, 1982 in the current session of Parliament. This Bill is being amended to give loans to sugar factories for undertaking bagasse-based cogeneration of power and for production of anhydrous alcohol/ethanol from alcohol. Besides the Bill seeks to defray the expenditure incurred by sugar factories on internal transport and freight on export shipments of sugar.

    The Seminar was organised by CACP to discuss certain issues pertaining to the growth of sugar industries which needed to be resolved by the Commission through wider public debate. The two-day seminar is being attended by the representatives of the sugar industry and cane growers besides representatives of State Governments as well as experts in the field.