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Why did the central government issue MSP guidelines for sugar mills?

  Mar 02, 2021

Why did the central government issue MSP guidelines for sugar mills?

Q. What is the news?

Recently , 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. While sugar mills have been threatened with action for selling sugar below the government-mandated MSP, the cane commissioners have been asked to track the sale of sugar and report any breach of MSP.

Q. What is MSP and why was it introduced?

Q. How has this mechanism worked so far?

Q. Why has the central government issued a notification asking for mills to adhere to MSP and the quota system?

Q. How will this order play up?

Q. Why are mills complaining of low sugar sell, when the government has announced a Rs 3,500 crore subsidy program for exports?

Ironically, the distress sales had started even as the central government announced a subsidy program for the sector. Till date around 25 lakh tonnes of exports have been inked by mills. But infrastructural problems like lack of containers at ports have put a spanner in the export plans. Most millers are not very optimistic about India fulfilling the 60 lt target for export given.