(a) whether sugar companies in the country are likely to book huge profits due to the
abnormal rise in prices of sugar in the recent past;
(b) if so, the details thereof and reaction of the Government thereto;
(c) whether sugarcane farmers did not benefit from the price rise as there was no
corresponding change in the prices of sugarcane during the said period; and
(d) if so, the details thereof and the reasons therefor?
MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND MINISTER OF STATE IN THE MINISTRY OF
CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION(PROF. K.V. THOMAS)
(a)&(b): The profit or loss of a company depends upon a number of factors like
realization from sale of its product/s, the marketing strategy, management efficiency etc.
As such, it is not possible to quantify or specify that the profits sugar companies have made
or are likely to make, are due to rise in price of sugar alone; though it can be stated that
rise in prices of sugar will have a positive impact on profits if other costs remain the same.
(c)&(d): Under the provisions of the Sugarcane (Control) Order, 1966, the farmers are
entitled to receive fair and remunerative price (FRP) as fixed by the Central Government. For
the current sugar season 2009-10, the Central Government has fixed the FRP at Rs.129.84 per
quintal linked to 9.5% recovery level with increase of Rs.1.37 for every 0.1% point increase
in the recovery above 9.5%. This is the benchmark price only below which no sugar factory can
purchase sugarcane from sugarcane farmers. However, the farmers are receiving cane price much
above the FRP on account of lower production of sugarcane and firm sugar prices in the current
sugar season.