The Indian government has established a high-level committee, chaired by former NITI Aayog member Professor Ramesh Chand, to address critical issues faced by sugarcane farmers and the broader sugar sector. The panel's primary mandate includes reviewing the minimum selling price (MSP) of sugar and examining ways to ensure more remunerative returns for farmers.
Committee Mandate and Farmer Concerns
The formation of this committee follows recent meetings between sugarcane farmer representatives from Karnataka and Maharashtra and Union Ministers for Agriculture and Farmers Welfare, and Consumer Affairs, Food and Public Distribution. Farmers have consistently raised concerns over inadequate returns and the need for a revised sugar MSP that reflects current production costs and market realities.
Key terms of reference for the committee include:
- Examining demands for increased remunerative returns for sugarcane farmers, factoring in cultivation costs and other relevant economic indicators.
- Reviewing the existing ex-mill minimum selling price of sugar, considering overall sugar production costs, market realizations, and the financial viability of sugar mills.
This review is particularly timely given ongoing discussions about balancing fair compensation for farmers with the economic sustainability of sugar processing units. Any adjustments to the sugar MSP could significantly impact mill revenues and the economics of the entire sugar production chain, though no immediate price changes have been announced.
Transparency in Sugar Recovery and Weighing Practices
Beyond pricing, the committee will also scrutinize operational aspects crucial to farmer remuneration and sector transparency:
- Sugar Recovery: The panel will review current mechanisms for testing and reporting sugar recovery rates, which directly influence the value derived from sugarcane. It aims to recommend measures for transparent verification of these recovery levels.
- Weighment Practices: An assessment of prevailing sugarcane weighment practices at mills will be conducted. This includes evaluating the adequacy of calibration, inspection, and verification systems to address concerns about accuracy and transparency in weighing procedures.
- Mechanical Harvesting Deductions: The committee will examine deductions applied to the weight of mechanically harvested sugarcane. It seeks to quantify actual losses, if any, from mechanised harvesting and evaluate the financial impact of current deduction policies on the final price paid to farmers.
The committee is also empowered to consider any other related matters it deems necessary for a comprehensive review of the sector.
Stakeholder Consultation and Reporting
To ensure a holistic perspective, the committee plans to consult a wide range of stakeholders. These include farmers’ representatives, sugar mill associations, state governments, and other relevant experts or organizations. The panel is tasked with submitting its findings and specific recommendations as early as possible for consideration by the competent authority.
Comprising Professor Ramesh Chand as chairman, the committee also includes the Agriculture Commissioner in the Ministry of Agriculture and Farmers Welfare, the Joint Secretary (Sugar) in the Department of Food and Public Distribution, and the Joint Secretary (Legal Metrology) in the Department of Consumer Affairs.
Professor Chand's extensive background includes serving as a NITI Aayog member from 2015 to 2026, Director of the ICAR-National Institute of Agricultural Economics and Policy Research, and a member of the Fifteenth Finance Commission. The committee's recommendations will inform future policy decisions by the government.