India sets ethanol price for five years to give mills stability but raises cane price

In India, the Business Standard newspaper reports that the government has agreed to set the ethanol price for five years, which is expected to give sugar mills stability and increase revenues. Yet at the same time, the government has also increased the price mills must pay farmers for sugarcane. Policy over the past many years has seen the government boost the price of cane, then the price of sugar to compensate, only to boost the price of cane again. Now cane is profitable enough for farmers to switch away from other crops despite the country continuing to swim in a surplus that it can’t export onto the world market.