The prime minister’s office (PMO) asking the food ministry to explore the possibility of imposing a cess on sugar is a good idea since it will help ameliorate the distress of both farmers and sugar mills in times of a collapse in prices. The food ministry will have to find out whether, post-GST, a cess can even be considered, but if it is, it will jell with the Rangarajan reforms implemented in most large cane-growing states, except Uttar Pradesh (UP). Take the case where, based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), the government notifies a fair and remunerative price (FRP) of Rs 255 per quintal, which sugarcane mills have to pay the farmers. Under the Rangarajan formula, 70% of the proceeds from all sugarcane and various byproducts, like molasses, have to be given to the farmers—so, if mills earn `400 per quintal at the end of the season, the farmers’ share will be Rs 280 and the mills will have to pay them another `25. But, if sugar prices crash and the farmers’ share works out to Rs 240, the cess/fund can give the mills `15, and they will continue to make payments to the farmers on time. Ideally, the cess should be kept as low as possible, else it will raise consumer prices unduly—if it so happens, the cess is not possible, the government will have to think in terms of making a contribution from the budget.