The inter-ministerial group of secretaries on sugar has categorically stated that state-advised prices (SAP) for sugarcane was illegal and should be stopped.
Central assistance to states to pay SAP in the current year should be a one-time measure subject to an undertaking from the states promising to stop the practice of announcing higher prices.
The states would also have to withdraw the special leave petitions filed against High Court orders declaring SAP as illegal. The Union government should discourage the practice through the SDF mechanism, the panel has recommended.
The Centre has already announced a Rs 609-crore package for payment of higher prices to cane growers. The details of the package were being worked out.
The group has estimated that payment of higher SAP promised to farmers would cost about Rs 900 crore. The difference between SAP and MSP was on an average about Rs 12 per quintal across states.
