By: ICN Bureau
Last updated : August 27, 2021 9:33 am
In the current sugar season 2020-21, about 2,976 lakh tons of sugarcane worth Rs. 91,000 crore was purchased by sugar mills
Keeping the expected increase in the production of sugarcane in the ensuing sugar season 2021-22, about 3,088 lakh tons of sugarcane is likely to be purchased by sugar mills.
In the current sugar season 2020-21, about 2,976 lakh tons of sugarcane worth Rs. 91,000 crore was purchased by sugar mills, which is at an all time high and is the second highest next to the procurement of paddy crop at Minimum Support Price.
The total remittance to the sugarcane farmers will be about Rs. 1,00,000 crore. The Government through its pro-farmer measures will ensure that sugarcane farmers get their dues in time.
Keeping in view interest of sugarcane farmers, the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved Fair and Remunerative Price (FRP) of sugarcane for sugar season 2021-22 (October - September) at Rs. 290 per quintal for a basic recovery rate of 10%, providing a premium of Rs. 2.90/qtl for each 0.1% increase in recovery over and above 10% and reduction in FRP by Rs. 2.90/qtl for every 0.1% decrease in recovery.
The government’s proactive approach to protect the interest of farmers is also seen in the decision of no deduction in case of sugar mills where recovery is below 9.5%. Such farmers will get Rs. 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 in place of Rs. 270.75/qtl in current sugar season 2020-21.
The FRP approved shall be applicable for purchase of sugarcane from the farmers in the sugar season 2021-22 (starting w.e.f. 1st October, 2021) by sugar mills. The sugar sector is an important agro-based sector that impacts the livelihood of about 5 crores sugarcane farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities including farm labour and transportation.
The government is also encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol, which not only serves as a green fuel but also saves foreign exchange on account of crude oil import. In the last 2 sugar seasons 2018-19 and 2019-20, about 3.37 LMT and 9.26 LMT of sugar has been diverted to ethanol.
In the current sugar season 2020-21, more than 20 LMT is likely to be diverted. In the ensuing sugar season 2021-22, about 35 LMT of sugar is estimated to be diverted and by 2024-25 about 60 LMT of sugar is targeted to be diverted to ethanol, which would address the problem of excess sugarcane as well as delayed payment issue because farmers would get timely payment.
In past 3 sugar seasons about Rs. 22,000 crore revenue was generated by sugar mills/distilleries from sale of ethanol to Oil Marketing Companies (OMCs). In the current sugar season 2020-21, about Rs. 15,000 crore revenue is being generated by sugar mills from sale of ethanol to OMCs at 8.5%. This is expected to significantly increase in the next 3 years as we go upto 20% blending by 2025.