The State government has decided to abandon the system of State Advisory Price (SAP) for sugarcane and instead, it will follow the revenue-sharing price fixation model from this year.
The new model would be based on the recommendations of the Rangarajan Committee. Under the proposed system, cane farmers would be assured of the Fair and Remunerative Price (FRP) and a share in profits, which would accrue to sugar mills. Until now, at the beginning of every sugarcane cultivation season, the government announced the SAP over and above the FRP.
‘Sector in deep distress’
Announcing a major policy change on the farmers, Deputy Chief Minister O. Panneerselvam pointed out that major States – Maharashtra and Karnataka – had migrated to the revenue sharing model. He also touched upon the state of the sugar industry, which, Mr. Panneerselvam said, was “currently going through” an “extended phase of distress” due to a variety of factors.
To protect the interests of the farmers during the period of transition, the government would pay the difference between the present SAP of ₹2,750 per tonne and the price to be received by the agriculturists under the new system. Also, the transportation cost would continue to be borne by the sugar industry. The budget had earmarked an amount of ₹200 crore towards “transitional production incentive.”
The Deputy Chief Minister added that a special scheme would be implemented over 55,000 acres in consultation with the sugar mills for improving sugarcane productivity and sugar recovery.
