India raises sugarcane floor price to woo farmers, boost planting
India's cabinet on Wednesday approved an increase in the floor price that sugar mills must pay for cane in the season beginning October 1 to 315 Indian rupees ($3.84) per 100 kg, from 305 rupees a year earlier, the country's information minister said.
It is reported by sg.news.yahoo.com.
«By raising the Fair And Remunerative Price to 315 rupees, the government has ensured that farmers get good returns for their produce», — Anurag Thakur told a media conference.
The federal government raises the floor price for cane, also known as the Fair And Remunerative Price, almost every year.
Higher prices could encourage farmers to boost cane planting and help India, the world's second biggest sugar exporter, allow overseas shipments.
Reuters last month reported Prime Minister Narendra Modi's administration was not considering allowing sugar exports until at least the first half of the next 2023-24 season as the El Nino weather pattern could reduce rainfall and dent production.
The El Nino weather pattern, which triggered most droughts that India faced during the past seven decades, could bring about extreme weather later this year.
Due to the lower output, India allowed exports of 6.1 million tonnes for this season. As the quota is exhausted, India is currently not exporting sugar.
Sugar, a politically sensitive commodity, is heavily regulated by the government. Other than announcing the cane floor price, the federal government fixes the quantity each mill can sell in the open market.
India will hold general elections early next year, and higher cane floor price would help Modi's ruling Bharatiya Janata Party woo farmers, a sizeable chunk of voters in a country where nearly half of the 1.4 billion population is dependent on farming.
After the federal government fixes the cane price, Uttar Pradesh state, the country's leading cane producer, invariably raises the floor price further due to its millions of cane growers.