INADEQUATE BAILOUT

THE GOVERNMENT’S bailout package for sugarcane farmers is a disappointing short-term measure. It came right after the BJP’s defeat in the Kairana Lok Sabha bypoll in Uttar Pradesh.

A recent order by the Cabinet Committee on Economic Affairs fixed the minimum price of refined sugar at ` 29 per kg (mill gate rates) instead of ` 35 that sugarcane growers’ associations were hoping for. Since the question of linking sugarcane prices to end-product realisation still stands, sugar mills blocked farmers’ payments as the sugar prices fell below production cost.

Given the record production of 31.5 million tonnes in 2017/18 (against the annual domestic demand of 25 million tonnes) fixed the minimum price and the commitment of buffer stock, the sugar industry may accumulate only about ` 8,500 crore. However, it requires ` 22,000 crore to pay farmers’ arrears. The need of the hour is an overarching policy rather than a stopgap measure.