Sweet Deal for Farmers? India Rethinks 6-Decade Old Sugar Law to Boost Income!

The Indian government is reviewing the Sugarcane (Control) Order, 1966, a law that has governed the country's substantial sugarcane industry for over six decades. This modernization effort aims to address outdated regulations and potentially boost the income of millions of sugarcane farmers.

Currently, the Fair and Remunerative Price (FRP), the minimum price sugar mills must pay farmers, is primarily linked to sugar prices. However, the sugar industry has diversified significantly, producing valuable by-products such as ethanol, electricity, molasses, bagasse, and bio-CNG. The existing order fails to account for the revenue generated from these additional streams, limiting farmers' benefits.

The proposed draft order seeks to rectify this by linking the FRP to the total revenue derived from all sugarcane-based products. This pricing overhaul is expected to provide farmers with a fairer share of the industry's profits. Additionally, the new regulations propose faster payment of dues to farmers, mandating payment within 14 days of cane purchase, a significant improvement over current practices.

The review also includes reconsidering the 15-km minimum distance rule between sugar factories, a regulation from a time when the industry was less developed. Removing this rule could foster competition and allow for more mills, particularly in sugarcane-rich regions, potentially increasing efficiency and accessibility for farmers. The changes are anticipated to simplify definitions, clarify provisions, and enhance the competitiveness of India's ₹1.3-trillion sugar sector in the global market, potentially stabilizing retail sugar prices.

Heading: Impact

This news is likely to have a positive impact on Indian sugarcane farmers by increasing their income potential and ensuring timely payments. Sugar mills may see changes in their operational models and revenue sharing. Consumers could benefit from more stable sugar prices, and the overall Indian sugar industry could become more globally competitive. The political landscape in major sugarcane-producing states like Uttar Pradesh, Maharashtra, and Karnataka is also likely to be influenced.

Impact Rating: 7/10

Heading: Difficult Terms Explained

* **Fair and Remunerative Price (FRP)**: The minimum price that sugar mills are legally required to pay to sugarcane farmers for their produce, as fixed by the central government. * **State Advised Price (SAP)**: A higher price for sugarcane recommended by some state governments in addition to the FRP, often found in states like Uttar Pradesh, Punjab, and Haryana. * **Bagasse**: A dry fibrous residue left after sugarcane stalks are crushed to extract their juice, often used as fuel in sugar mills. * **Bio-CNG**: Biogas that has been purified to match the quality of natural gas, often produced from agricultural waste or other organic matter. * **Cooperative Mills**: Sugar factories owned and operated by a group of farmers (cooperatives) who are also the primary suppliers of sugarcane. * **Private Mills**: Sugar factories owned and operated by private individuals or companies. * **Public Sector Factories**: Sugar factories owned and operated by the government. * **Sugarcane Recovery Rate**: The percentage of sugar that can be extracted from a given amount of sugarcane. * **Quintal**: A unit of weight, typically equal to 100 kilograms.