Union Cabinet on Wednesday approved a hike in fair and remunerative price (FRP) for sugarcane farmers. The price has been increased by Rs 5 to Rs 290 per quintal for the next marketing year. This was highest ever FRP approved for sugarcane farmers. This move is likely to benefit 5 crore sugarcane farmers and their dependents, Union minister Piyush Goyal said on Wednesday. This increase in FRP will also help 5 lakh workers employed in sugar mills and related ancillary activities, the minister added.
The marketing year for sugarcane farmer starts from October. The decision was taken in a meeting of Cabinet Committee on Economic Affairs (CCEA).
Explaining the mechanism behind the price hike, Goyal said, “The new price will be based on 10 per cent recovery. Even if a farmer has less than 9.5% recovery, their fair and remunerative price will be Rs 275 per quintal…Using advanced technology, our farmers have improved recovery (in the country)."
“Recovery is improving across the country. Sugar recovery from sugarcane is going up. Last year, export was also at a record high. About 70 lakh tonnes export contracts… (last year)," Goyal added.
Introduced under, Sugarcane (Control) Order, 1966, the FRP is the minimum price that sugar mills have to pay to sugarcane farmers. The FRP takes into account account the actual cost of production, demand and supply, likely impact on sugar prices and also the international prices.
The central government had last increased the minimum price sugar mills pay to sugarcane growers in August 2020. The fair and remunerative price was hiked by ₹10 to ₹285 per quintal for 2020-21 marketing year.
It must be noted that major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana have their own sugarcane price called ‘state advisory prices’ (SAPs). This is usually higher than the Centre’s FRP.