Centre floats draft amendments to marquee Sugarcane Control Order, 1966

Draft proposes minimum distance criteria between mills at 25 km, mandates khandsari units to pay Centre-fixed Fair and Remunerative Price to cane growers

The central government has floated a draft amendment to the marquee Sugarcane (Control) Order, 1966, which regulates the entire sector, proposing a minimum distance of 25 kilometre between mills, and underlying the need for khandsari units to pay the fixed fair and remunerative price (FRP) to cane growers.

 

According to experts, the draft also seeks to regulate the khandsari units by making licence mandatory for them and also subjecting them to regular checks and inspections.

 

Khandsari is a traditional, unrefined raw sugar derived from cane. Comments to the draft, which was floated on Monday, are required to be sent by May 20.

   

According to rough estimates, around 31 per cent of India's annual sugarcane production of 435 million tonnes is used by the gur, khandsari and jaggery units. Meanwhile, on distance between mills, experts said several states such as Maharashtra already have mandatory distance of 25 kilometres between two mills.

 

Experts said that the draft also proposed directing mills to pay interest to cane growers at the rate of 14 per cent per annum beyond the mandatory 14 days from the purchase of cane

 

The draft has been floated ahead of the big Uttar Pradesh state elections in 2027. Sugar and sugarcane economy is a major issue in the western parts of the state.

 

Meanwhile, the draft also clearly stated that in case the sugarcane price remained unpaid on the last day of the sugar year, in which cane supply was made to the sugar factory, the sugar producer should deposit the money with the district collector in which the sugar factory is situated, within three months of the close of the sugar year.

 

“The Collector shall pay, out of the amount so deposited, all claims, considered payable by him and preferred before him within 3 years of the close of the sugar year in which the cane was supplied to the sugar factory. The amount still remaining un-disbursed with the Collector, after meeting the claims from the suppliers, shall be credited by him to the Consolidated Fund of the State, immediately after the expiry of the time limit of three years within which claims therefor could be preferred by the suppliers,” the draft read.

 

 The state governments shall, as far as possible, utilise such amounts, for development of sugarcane in the state, it added. Industry and subject experts said that several provisions of the draft were present in the existing sugarcane control order currently in force since the last more than 60 years, while a detailed study is needed for the other changes proposed.

 

 “We would ideally like the 14-day penalty provision removed, as it leads to the buildup of arrears and instead replaced by a deferred payment and dual pricing mechanism,” a senior industry official remarked