The Ministry of Consumer Affairs, Food and Public Distribution issued separate guidelines for sugar mills and cane commissioners in regards to sale of sugar below the Minimum Selling Price (MSP) of Rs 3,100/- per quintal.
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To control the constant slide in ex-mill prices of sugar, the central government had in June 2018 specified the concept of MSP for sugar.
Back then the MSP was fixed at Rs 2,850/- per quintal which was subsequently raised to Rs 3,100/- per quintal.
Along with MSP, the centre had also fixed mill wise sales quota.
Mills who breached either of the conditions were liable for action under the Essential Commodities Act, 1955 which would include fine as well as a jail term(ranging from 3 months to 7 years) or both.
These out of box measures were brought in to arrest the constant slide of sugar and to keep the demand supply ratio to a safe limit.
It was reasoned that both these measures would help mills generate enough revenue to pay their farmers the Fair and Remunerative Price (FRP) for cane purchased from farmers.
