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Minimum selling price for sugar

Topics Covered: Issues related to direct and indirect farm subsidies and minimum support prices.

Minimum selling price for sugar:


Context:

The Indian Sugar Mills’ Association (ISMA) has asked the government to raise the minimum selling price for sugar to ₹34.50 a kg.

Sugar Pricing Policy:

Price of sugar are market driven & depends on demand & supply of sugar. However, with a view to protect the interests of farmers, concept of Minimum Selling Price (MSP) of sugar was introduced in 2018 so that industry may get atleast the minimum cost of production of sugar, so as to enable them to clear cane price dues of farmers.

  • In exercise of the powers conferred under the Essential Commodities Act, 1955, Government has notified Sugar Price (Control) Order, 2018.
  • Under the provisions of said order, Government will fix the Minimum Selling Price (MSP).
  • MSP of sugar has been fixed taking into account the components of Fair & Remunerative Price (FRP) of sugarcane and minimum conversion cost of the most efficient mills.

Background:

The Federal/Central Government announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.

InstaLinks:

Prelims Link:

  1. What is Minimum Selling Price?
  2. How is it set?
  3. Differences between Minimum Support Price and Minimum Selling Price.
  4. What is FRP?

Mains Link:

Discuss the significance of Minimum Selling Price (MSP) for sugar.

Sources: the Hindu.