Government's price advisory body CACP today asked states like Uttar Pradesh not to fix cane price and adopt revenue sharing formula to make payment to farmers for the growth of the sugar industry.
The sugar industry should set up transparent system for weighment of sugarcane and determining sugar recovery to create better trust between farmers and mills, the Commission for Agricultural Costs and Prices (CACP) Chairman Vijay Paul Sharma said here.
"We are talking to states and requesting them to adopt FRP and revenue sharing formula," Sharma said at the AGM of Indian Sugar Mills Association (ISMA).
Only Maharashtra and Karnataka have so far adopted the revenue sharing formula, he said, and hoped that more states would soon come on board.
UP, Haryana, Punjab, Uttarakhand and Bihar continue to fix cane price called SAP (state-advised price), which is higher than the Centre's fair and remunerative price (FRP). There are six other producing states that follow FRP.
The Rangarajan panel had in October recommended that the sugarcane price should be determined at 75 per cent of the revenue realisation from sugar and some by-products.
On the cane pricing, Sharma said the difficult area is to get rid of SAP, which he said is not determined scientifically and does not incentivise efficiency.
The CACP Chairman favoured setting up of price stabilisation fund to protect farmers interest if realisation of mills drop below FRP under the revenue sharing formula.
However, he said this fund should be self-sustainable and there should not be any burden on the government.
"All the stakeholders which is industry, farmers and consumers should contribute to this pool," he said, this fund would be needed only once in 3-4 years.
Stating that the cane productivity is stagnant, Sharma said there is a need to boost it in terms of tonnage and sugar recovery.
With cane being labour intensive crop, he asked millers to go for farm mechanisation particularly for harvesting.
Sharma suggested the industry body to collaborate with the ICAR and other agri research bodies to get right kind of machines.
The CACP Chairman told millers to encourage farmers to use micro irrigation for the crop.
Sharma said that there is some kind of mistrust between farmers and sugar mills on the issue of weighment of cane and sugar recovery.
He asked the industry to have transparent mechanism for cane weighment.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)