13 May 2022, New Delhi: The Commission for Agricultural Costs and Prices has recommended repeal of the cane area reservation and minimum distance criteria so that farmers can choose the mill they want to sell their produce to, two senior government officials told Informist.
“Farmers should be allowed to supply cane to the mill of their own choice, which makes higher and timely payment,” one of the officials said.
The government has specified a cane reservation area, under which farmers have to sell their produce to a particular sugar mill and the mill cannot deny buying it.
Under the Sugarcane (Control) Order, the Centre has prescribed a minimum radial distance of 15 km between any two sugar mills to ensure a minimum availability of sugarcane for all mills.
These restrictions have reduced farmers’ bargaining power as they are forced to engage with the mill, irrespective of its cane arrear performance, the official said.
“…these criteria may be reviewed to ensure healthy competition among millers and better price discovery for quality of farmers’ produce,” one of the officials said, citing the report of the commission.
Barring Maharashtra, which is the country’s largest sugar producer, all other states follow the cane reservation area criteria.
Uttar Pradesh, Karnataka, Andhra Pradesh, Gujarat, Haryana, Telangana, Bihar and Punjab still continue with cane area reservation and minimum distance criteria.
The panel has also suggested the Centre to take up the matter with states and come up with specific steps to remove policy distortion in the sugar sector.
India is the world’s second-largest producer of sugarcane, after Brazil. End