ISMA calls for policy interventions to safeguard farmers

Indian Sugar and Bio-Energy Manufacturers Association (ISMA), the apex body of India’s sugar and bio-energy industry, is appealing to the government to raise the Minimum Sale Price (MSP) of sugar to Rs 39.14 per kg to ensure industry sustainability amid rising costs and a sugar surplus.

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has urged the government to take prompt policy action to ensure the sustainability of the sugar industry, which is facing rising production costs, stagnant ethanol procurement prices, and a projected sugar surplus. 

 ISMA is advocating for an adjustment of the Minimum Sale Price (MSP) of sugar to Rs 39.14 per kg for the 2024-25 season and an increase in ethanol procurement prices. These adjustments are essential for stabilizing the sector, ensuring timely payments to farmers, and supporting the growth of renewable energy through ethanol production.

According to M Prabhakar Rao, president, ISMA, “We need urgent support from the Govt. to increase the MSP of sugar to reduce losses being faced by the industry. The increase of MSP will protect the minimum ex-factory price particularly during the crushing season during which the prices tend to go below the cost of production, bleeding the Mills and making them financially unviable.” This may lead to a delay in payment of cane arrears and sometimes defaults to the farmers, he added.

Mr. Rao stated that ISMA has been requesting to revise the MSP to at least Rs 39.14 per kg, based on the same formula that was used for fixing the MSP in 2017-18 and 2018-19. 

He said, “Even if the MSP for sugar is fixed at Rs. 39.14, the increase of the sugar prices over the last 10 years will be only 0.95%  per annum, much lower than the consumer price increase of 2.23% per year. As such, more than 60% of the sugar is consumed by the beverages, confectionery and other food industries, who are capable of absorbing these prices. There is no cost implication to the ex-chequer.”