The Union Cabinet Committee on Economic Affairs on Wednesday hiked the fair and remunerative price (FRP) of sugarcane by Rs 10 per quintal to Rs 315 for the 2023-24 season that will start from October. The increase in FRP last year was of Rs 15 per quintal.
According to the Sugarcane (Control) Order of 1966, FRP is the minimum price that sugar mills have to pay to sugarcane farmers.
According to Wednesday’s Cabinet decision, the FRP of Rs 315 per quintal is linked to a basic recovery rate of 10.25 per cent. Recovery rate is the amount of sugar that sugarcane fetches, and higher the quantum of sugar derived from sugarcane, greater the price it fetches in the market.
The official statement said that for every 0.1 per cent rise in recovery over 10.25 per cent, a premium of Rs 3.07 per quintal will have to be paid to the farmer, while for every 0.1 per cent reduction in recovery below 10.25 per cent, FRP payable will be lowered by Rs 3.07 per quintal.
However, to protect the interest of farmers — especially those who don’t have very high yielding varieties — the official statement said that Centre has decided to fix a price of Rs 291.75 per quintal for 9.5 per cent recovery and there shall not be any deduction below the same.
Last year, the same rate for recovery below 9.5 per cent was Rs 282.12 quintal.
However, sources said in states where this system of payment based on FRP is followed, the majority of farmers might be paid at the lower end of the band as recovery this year has been below 10.25 per cent, except in some states such as Gujarat.
Also, big sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called ‘state advisory prices’ (SAPs), which is higher than the Centre’s FRP.
First Published: Jun 28 2023 | 11:00 PM IST
