Sugarcane pricing policy

The Central Government fixes the Statutory Minimum Price (SMP) of sugarcane in terms of Clause 3 of the Sugarcane (Control) Order, 1966 for each sugar season. The SMP is fixed on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consulting the State Governments and associations of sugar industry and cane growers.

Statutory Minimum Price of Sugarcane: The Central Government has fixed the Statutory Minimum Price (SMP) of Sugarcane for the 2003-04 sugar season at Rs 73 per quintal linked to a basic recovery of 8.5 per cent, subject to a premium of 85 paise for every 0.1 per cent point increase in the recovery above that level. The SMP of sugarcane payable by sugar factories for each sugar season since 1999-2000 is shown in the following table:

Sugar Seasons	SMP (Rs per quintal)
1999-2000	56.10
2000-2001	59.50
2001-2002	62.05
2002-2003	69.50
2003-2004	73.00

Buffer Stock: In view of high carry forward stocks of sugar, decline in sugar prices in the open market and high cane price arrears, the Government decided to create a buffer stock of 20 lakh tonnes of sugar for a period of one year from 18 December 2003. This involved an outgo of about Rs 412 crore from Sugar Development Fund (SDF). Rs 374 crore was to be projected to have been released by the scheduled commercial banks to the concerned sugar mills as additional credit on their buffer stock quantity. As the SDF rules provide, the entire amount of Rs 786 crore including Rs 374 crore to be released by the commercial banks was to be used exclusively by the sugar mills for payment of cane price to the farmers.

It was decided by the Government to extend the period of maintenance of buffer stock of sugar by one year. The buffer subsidy payable for one year beyond 17 December 2003 would be about Rs 403 crore. The additional credit from the banks against buffer stock quantity would be about Rs 390 crore. This will give some relief to the ailing sugar industry and sugarcane growers, and both the additional credit and the buffer subsidy will be utilised for payment of cane price dues and the total amount available for such payment would be Rs 793 crore for one year. 317 cases out of 362 cases have been cleared for advance buffer subsidy amounting to Rs 205 crore.

Packages of Special Assistance for clearance of sugarcane price arrears: The Central Government has announced two packages of special assistance to the State Governments to help them in the clearance of sugarcane price arrears in respect of 2002-03 sugar season.

It has also been decided that the Central Government would provide a one-time assistance to the State Governments by permitting them to raise additional market borrowings to be used only for liquidating the cane price arrears of the mills in the cooperative and public sectors, where the practice of announcing the State-Advised Prices of sugarcane exists in all sugar mills in the States where no practice exists.

The Government has amended the Sugarcane (Control) Order, 1966 on 29 November 2000 enabling the Central Government/State Governments/Officers authorised by the Central Government/State Governments to recover the arrears of cane prices remaining unpaid after 14 days supply of sugarcane by the growers, together with interest at the rate of 15 per cent per annum thereon, as arrears of land revenue.

Fruit and Vegetable Processing Industries

The Directorate of Food and Vegetable Processing in the Ministry is responsible for implementation of Fruit Products Order (FPO), 1955 issued under the Essential Commodities Act, 1955 to ensure hygienic and good quality products manufactured and sold. The Directorate has four regional offices at Delhi, Kolkata, Mumbai and Chennai and two sub-offices at Lucknow and Guwahati.

The installed capacity of fruit and vegetable processing industry has been increased from 11.08 lakh tonnes in January 1993 to 23.28 lakh tonnes in January 2004. The utilisation of fruits and vegetables for processing in the organised and unorganised sectors is estimated to be around two per cent of the total production. During 2003-04 (as on 31 March 2004), an amount of Rs 3.65 crore was approved/sanctioned to 21 such industrial units in the country.