Maharashtra’s sugar mills warn of potential halt to cane crushing season over MSP and ethanol price stalemate

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The sugar industry in Maharashtra has issued a warning that many sugar mills may be unable to start their crushing operations this season if the government does not take prompt action to increase the minimum selling price (MSP) of sugar and ethanol. Represented by the West Indian Sugar Mills Association (WISMA), the industry has submitted an urgent memorandum to union government seeking a minimum ₹7 increase in sugar MSP and a ₹5 to ₹7 hike in ethanol prices. Industry leaders have urged that this demand be met by November 15 to avoid widespread disruptions to the crushing season and potential fallout for sugarcane farmers.

The WISMA has expressed concern that the government’s decision to hold off on raising the MSP is a setback for the industry’s sustainability. Despite annual hikes in the Fair and Remunerative Price (FRP) for sugarcane, the MSP of sugar has remained unchanged since 2019, placing mills under severe financial strain. According to WISMA, the resulting debt burden could severely impact both the industry and sugarcane farmers, potentially leading to long-term economic repercussions.

In its statement, WISMA emphasized the vital role of the sugar industry in the rural economy, calling it the second-largest contributor and a key source of livelihood for farmers and labourers. Despite its significance, the industry receives little support from the central or state governments, WISMA stated, noting that appeals for incentives and MSP adjustments have gone largely unheeded. As the FRP for sugarcane increases each year, the industry asserts that it is only fair to expect a corresponding rise in the MSP of sugar to keep mills financially viable and ensure they can meet FRP obligations.

The union government, which consults with the Commission for Agricultural Costs and Prices (CACP) annually to determine FRP, considers input from stakeholders including sugar industry representatives and farmers. Yet, WISMA contends that the government’s focus has been solely on raising the FRP and enforcing lump-sum payments from mills, disregarding the industry’s calls for an MSP hike for sugar.

WISMA warns that this narrow policy approach could have dire consequences, potentially leading to a collapse of the industry. If the government does not address these demands, WISMA cautions that the upcoming crushing season will be jeopardized, placing the industry and union government’s ethanol-blending program at risk and leaving sugarcane farmers without timely payments.