Previous Year Question
Consider the following statements:
The Union Government fixes the Statutory Minimum Price of sugarcane for each sugar season.
Sugar and sugarcane are essential commodities under the Essential Commodities Act.
Which of the statements given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Correct Answer: C
Detailed Solution
Statement 1 is correct.
The Central Government fixes a statutory floor price for sugarcane for every sugar season. The question uses the earlier expression Statutory Minimum Price—SMP.
Under the Sugarcane (Control) Order, 1966, the Central Government considered factors such as:
Cost of sugarcane production.
Returns available to farmers from alternative crops.
General trend in agricultural commodity prices.
Availability of sugar to consumers at a fair price.
Recovery of sugar from sugarcane.
Value realised from sugar and its by-products.
Important temporal change: Following an amendment to the Sugarcane (Control) Order in 2009, the Fair and Remunerative Price replaced the SMP from the 2009-10 sugar season.
The present official terminology is therefore FRP. The question uses SMP as the earlier name for the statutory Central price-setting mechanism.
State Governments may separately announce a State Advised Price. Where an SAP applies, sugar mills may be required to pay the higher price prescribed under the State framework.
Statement 2 is correct.
Sugar and sugarcane fall within the regulatory framework for essential food commodities under the Essential Commodities Act, 1955. The Sugarcane (Control) Order, 1966 and control orders relating to sugar were issued through the powers conferred by Section 3 of this Act.
The framework enables regulation of matters such as:
Sugarcane price.
Supply of sugarcane to mills.
Reservation of cane-purchasing areas.
Production, storage and distribution of sugar.
Controls relating to stock, sale and supply.
Therefore, both statements are correct.