NFCSF shared light on the implications of controls by the Government and major reforms needed. He said, “With area and production increasing year on year, the returns to farmers on sugarcane are exceedingly remunerative compared to other crops.

1. 6/13/2019 Major reforms needed for the sugar industry - Chinimandi
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“A timely arranged brain storming session held at
DFPD which will help the sugar sector to successfully
tackle the most challenging Sugar Season 2019-20
starting October” – Mr.Prakash Naiknavare
The Government has been intending to nd an actual
solution to bail out the sugar mills and sugarcane farmers
from the crisiseven though several measures had been taken
up in the last one year by them. To discuss long term
reforms for the sugar sector, short term measures and
strategies to be adopted in making things better for the
sugar industry, the Department of Food and Public
Distribution had called a meeting on 11 June, 2019.
As per the sources, the meeting was attended by Principal
Secretaries for sugar and sugar Development of various
states, cane commissioners of various states, Joint secretary
of Petroleum and Natural Gas, Director of National Sugar
Institute, Managing Directors of Federations of Coop Sugar
Mills of various states, Professor from Indian Institute of
Foreign Trade, presidents of various sugar mills and trade
associations, managing directors of mills around the country
and exporters and each one of them shared their suggestions and perspective for the Indian Sugar
Industry.
National Federation of Cooperative Sugar Factories (NFCSF) put forth its opinions with a worm’s eye view
with hopes that the industry would get some sweet dozes from the government that would improve the
current scenario, where the beleaguered sugar mills have been under nancial stress as they have been
choked up with surplus stocks of sugar, low demand in the market, and piling cane arrears. On the other
hand, the country is striving to escalate exports to accomplish the target of MIEQ of 50 LMT by exploring
new markets; however that seems to be next to impossible considering the current global prices and
bumper harvest in the sugar producing countries.
In a conversation with ChiniMandi.com, Mr. Prakash Naiknavare– Managing Director – NFCSF shared
light on the implications of controls by the Government and major reforms needed. He said, “With area
and production increasing year on year, the returns to farmers on sugarcane are exceedingly remunerative
compared to other crops. There have been excessive sugar inventories due to which the financial situation
of Cooperatives continues to be grim. Despite this cooperative mills have exported 70% of their MIEQ of
2018-19. These situations are just leading to a vicious circle and cooperatives are losing pro table
opportunities.”
“Now, the Sugar year 2019-2020 is poised to challenge on account of highest ever opening stock and
inventory, therefore there is dire need for continued support in the form of additional bu er stock,
indirect scal help for exports. Favorable ground work done by sending delegation to select importing
countries need to be encashed by entering contracts in time for G2G and B2B transactions. The
Government should also keep continuation of current methodology of Monthly Quota System and its
stringent implementation. An initiative for special treatment required under the Govt. policy speci cally
for cooperative sector e.g. bridge funding in case of MIEQ should be announced. The Government should
announce a long term policy on Import and Export to manage the domestic demand & supply as well as
India playing consistent role in International sugar trade”, he further added.
By Shivani Rai - June 12, 2019
“A timely arranged brain storming session held at DFPD
which will help the sugar sector to successfully tackle
the most challenging Sugar Season 2019-20 starting
October” – Mr.Prakash Naiknavare

2. 6/13/2019 Major reforms needed for the sugar industry - Chinimandi
https://www.chinimandi.com/a-timely-arranged-brain-storming-session-held-at-dfpd-which-will-help-the-sugar-sector-to-successfully-tackle-the-most-ch… 2/2
The Central Govt. has the vision to achieve 20 percent ethanol blending with petrol by the next decade.
The rst milestone of 10 percent of ethanol blending with petrol is on a verge to be achieved next year as
already hit 5% has been accomplished this year where 150 crore liters is currently available.
Naiknavare said, “To accomplish the target for ethanol projects state/central guarantee is required
Ethanol procurement, pricing and blending policy for a longer period like 5-10 years and be aimed at
drawing away surplus sugar and sugarcane where partial juice usage for ethanol be made eligible for
purchase price of Rs.59.13/litre.”
“While many projects have progressed in private sector, not many projects in cooperatives could progress
due to bank loans not being sanctioned. The banking fraternity’s current mindset to put sugar sector in
“Caution list” needs to be changed. Excess land value surrounding mill may be taken for collateral
security while sanctioning loans for nancially weak mills. The Government should provide alternatives in
ways to stop hindrance of progress of the cooperative mills due to this. The subsidies should also be
credited in farmers account.
We have proposed for subsidization of railway freight for North East States for Cooperatives. Cooperatives
are ready to supply more sugar for third party MIEQ also. Here, reduction in stock is required for timely
start of the sugar mills, otherwise there may be issues eve for pre-seasonal expenses like advance
payment of H&T etc.
If the Rangrajan committee recommended model of revenue is implemented pan India for Sugarcane
Pricing by amending sugarcane control order along with implementation of Escrow account and direct
crediting of cane price, the cane growers would get relief from perpetual cane arrears causing frustration.
Adding to this, the cane pricing policy should also be rationalized by linking cane price with revenue and
there should be a creation of Cane Farmers Welfare Fund (CFWF) to bridge the gap between what the
industry is able to pay and FRP xed by the GOI. And apart from this if state Govt. wants to announce
their SAP over & above GOI’s FRP, then State Govt. should make budgetary provision for the same”, he
continued.
Currently the Minimum Selling Price of Sugar is Rs3100/Qntl needs to be revised upward by computing all
the actual costs on nance and depreciation so as to bring it close to, if not more than, the average cost
of production. Revising the MSP with a di erence of Rs.200/Qntl between M-30 and S-30 to enable
parity in ex-mill sugar prices pan India will reduce the nancial stress for fully paying FRP of sugarcane
by the mills.”
Mr.Naiknavare also shared, “Industrial buyers consume 60 to 70% of the total domestic consumption and
to bring nancial stability; Dual pricing of sugar is need of the hour, Rs.60/kg for industrial consumers &
Rs.35/kg for household consumers. To maintain better quality standards, jute packaging compulsion
should be completely diluted.”
Where the sugar industry is divided into segments of stakeholders, the Cooperative sugar sector that
attributes to a farmers organization contributes about 35% of total sugar production in India and also
plays a vital role in direct and indirect employment generation of rural folks. The sector has
approximately 55 lakh small and marginal cane growers are member shareholders and are directly
connected with federal bodies. The National Federation of Cooperative Sugar Factories (NFCSF) has tried
to be the voice of this fraternity and synergy to develop the Indian Sugar Industry.
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