India's sugar policy rests on the twin pillars of farmer remuneration and consumer protection. Discuss the tensions between the two and suggest structural reforms.

The Ministry of Consumer Affairs, Food & Public Distribution calls farmers and consumers the "two central pillars" of sugar policy [1]. Each pillar has its own tool. The Fair and Remunerative Price (FRP) protects growers, and stock limits protect buyers. These tools often pull against each other, so the balance stays fragile.

The two pillars

• Farmers: The FRP for 2025-26 is ₹355/qtl. That is 105.2% above the cost of production and 4.41% higher than last year. It supports about 5 crore farmers and their dependants [2].
• Consumers: El Niño-linked poor rainfall pushed prices up in mid-2026 [1]. The Centre responded in stages:
• It capped dealer stocks at 400 tonnes [3].
• It allowed 10 LMT of duty-free raw sugar imports [4].
• It then cut the dealer limit to 1,000 quintals (100 tonnes), with a 15-day holding cap [1].

Tensions between the two

• Margin squeeze on mills: The FRP rises every year by law, but ex-mill prices have fallen about 28% [1][2]. Mills' costs go up while their revenue goes down.
• Stock limits become arrears: Dealers and bulk buyers can now hold only small, short-lived stocks, so they buy less and unsold sugar piles up at mills [3]. The Rangarajan Committee found that such controls stop mills from raising cash, which delays payments to farmers [5].
• Past example: Cane arrears reached ₹20,167 crore in 2019. The government then raised the Minimum Selling Price of sugar from ₹29 to ₹31/kg, which put the cost back on consumers [6].
• Price gains not passed on: Retail prices fell only 15%, against 28% at the mill gate [1]. Neither farmers nor consumers get the full gain.
• Sudden import decisions: One-off duty-free import windows [4] make supply unpredictable for farmers and traders.

Structural reforms

• 70:30 revenue sharing: Farmers would get the FRP up front plus a later top-up linked to sugar sale prices, so mills' dues fall when prices fall [5].
• Stable tariffs: Replace fixed import and export quotas with a steady 5–10% duty [5].
• Rule-based stock limits: Use price triggers, such as the 2020 EC Amendment's 50% price rise, as a benchmark for when limits are justified [7].
• More competition for cane: Phase out cane reservation areas and review the 15 km distance rule between mills [5].
• Evidence-based policy: Publish the weekly stock data that dealers already file on the DFPD portal [3].

Today, farmers and consumers are protected by separate one-off measures, so helping one often hurts the other. Linking cane prices to market revenue and making trade and stock rules predictable can protect both groups together. This would follow the Rangarajan Committee's vision and SDG-2 (Zero Hunger) goals on farmer incomes and food security.