The government on Thursday set the minimum selling price of sugar by manufacturers at Rs 31 a kg against the earlier rate of Rs 29. This is aimed at boosting the liquidity of cashstrapped millers and help clear mounting cane arrears of around Rs 20,000 crore.

 

The increase would also push up the retail price, which was in the range of Rs 36 to Rs 40 per kg.

 

Food minister Ram Vilas Paswan told reporters that a mechanism will be put in place to ensure the benefit given to the industry is passed on to sugarcane farmers. The decision comes following demands from the sugar manufacturers and representation made by NCP chief and former agriculture minister Sharad Pawar to Prime Minister Narendra Modi. Paswan said that rate has been increased in view of the rising sugarcane arrears to farmers. The price revision was proposed by a committee of secretaries.

 

In the last few years, the government has taken several measures to help cashstarved mills clear cane dues. These include increase in import duty on sugar to 100 per cent, scrapping of export duty, creation of buffer stock, and subsidy for mandatory export of 5 million tonnes in the 2018-19 marketing year.