The decision to increase the Fair and Remunerative Price (FRP) of sugarcane for the 2020-21 marketing year (October-September) was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) held here.
The government had fixed sugarcane FRP at Rs 275 per quintal for the current 2019-20 marketing year.
“The CCEA has approved the sugarcane FRP for the 2020-21 at Rs 285 per quintal,” Information and Broadcasting Minister Prakash Javadekar said in a media briefing.
In a statement, the government said the FRP of Rs 285 per quintal has been fixed for a basic recovery rate of 10 per cent.
However, a premium of Rs 2.85 per quintal will be paid by sugar mills for every 0.1 per cent increase above 10 per cent in the recovery, it said.
Also, the government has made a provision for reduction in FRP by Rs 2.85 per quintal for every 0.1 percentage point decrease in recovery, in respect of those mills whose recovery is below 10 per cent but above 9.5 per cent.
However, for mills having recovery of 9.5 per cent or below, the FRP is fixed at Rs 270.75 per quintal.
“The determination of FRP will be in the interest of sugarcane growers keeping in view their entitlement to a fair and remunerative price for their produce,” the statement said.
The FRP has been fixed in line with the recommendation of the Commission of Agricultural Costs and Prices (CACP), a statutory body that advises the government on the pricing policy for major farm produce.
The FRP, which is determined under Sugarcane (Control) Order, 1966, is the minimum price that sugar mills have to pay to sugarcane farmers.
Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called ‘state advisory prices’ (SAPs), which are usually higher than the Centre’s FRP.
The government estimates the country’s total sugar production to be at 28-29 million tonne in the current year ending next month, compared to 33.1 million tonne during 2018-19, due to sharp fall in cane acreage in Maharashtra and Karnataka.