The government has announced a hike in the statutory
minimum price (SMP) for sugarcane to Rs81.18 per quintal
for next year in a bid to reverse a possible decline in
sugarcane acreage on top of a high sugar output this year.
government has approved the recommendations of the Commission
for Agricultural Costs and Prices (CACP) for fixing the
SMP of sugarcane for 2007-08 sugar season (Oct-Sept) at
Rs81.18 per quintal against Rs80.25 last year, finance
minister P Chidambaram said after a meeting of the cabinet
committee on economic affairs.
support price will be fixed on the assumption of a nine
per cent sugar recovery from cane, he said, adding there
would be a premium of 90 paise for every 0.1 percentage
point increase in the recovery above that level.
for sugarcane, which stood at Rs74.50 per quintal during
2004-05, was raised to Rs79.50 during 2005-06 and further
to Rs80.25 during 2006-07.
production in the country, estimated to touch 227 lakh
the current year, is likely to create a supply glut, which
may deter cane growers. The current hike in cane prices
is expected to act as an incentive to farmers to keep
production levels high.