The government has hiked the FRP (Fair and Remunerative price) for sugarcane by Rs 10 to Rs 285 per quintal for the year 2020-21, which starts from October 1.
The FRP, determined under Sugarcane (Control) Order, 1966, is the minimum price that sugar mills have to pay to sugarcane farmers. The move will benefit farmers as the cost of cultivation has increased.
The FRP is fixed after taking into account the actual cost of production, demand and supply, likely impact on sugar prices, and also the international prices.
The decision is in line with the suggestions of the Commission for Agricultural Costs and Prices (CACP) that had recommended a hike of Rs 10. The government had last changed the FRP in 2018.
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.
While the FRP has been hiked, the minimum selling price of sugar has not been hiked from the current Rs 31/kg. The outstanding sugarcane payment to farmers stands at a record Rs 17,000 crore as on July 31 2020, vs Rs 12,500 crore during the same period last year. Therefore, the hike in FRP and no hike in MSP doesn’t augur well for the sugar mills.
First Published: IST