THE ETHANOL SOLUTION
The sugar industry keeps facing the problem of oversupply every few years due to subsidies and assured purchase price
Mills struggle to pay farmers because they have to buy a minimum quantity of sugarcane in their catchment areas even if there is no demand
The target of 10 percent ethanol blending by 2022 is expected to absorb excess supplies and help both farmers and mills. It will also reduce imports of petrol
The industry has been demanding for years that FRP should be linked to sugar prices that move according to demand and supply. This was advocated by the Rangarajan Committee way back in 2012. Reducing FRP, however, could mean a fall in income for farmers, something no government can afford.
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