Homeeconomy News

    Centre hikes FRP on sugarcane by Rs 5 to Rs 290 per quintal

    economy | IST

    Centre hikes FRP on sugarcane by Rs 5 to Rs 290 per quintal


    The FRP approved shall be applicable for the purchase of sugarcane from the farmers in the sugar season 2021-22 (starting w.e.f. October 1, 2021) by sugar mills.

    The Cabinet on Wednesday approved a decision to raise the fair and remunerative price (FRP) of sugarcane by Rs 5 to Rs 290 per quintal for the upcoming sugar season, Piyush Goyal, Union Minister for Commerce, Industry, Food & Public Distribution, said in a cabinet briefing.
    The FRP is based on a 10 percent recovery by sugarcane farmers, Goyal said, adding that there will be an incremental amount fixed at Rs 2.90 per quintal which sugar mills will pay farmers for every 0.10 percent increase in recovery beyond the 10 percent base. There will also be a reduction in FRP by Rs 2.90/quintal for every 0.1 percent decrease in recovery.
    However, in case of recoveries fall below 9.5 percent, the price paid to farmers will be fixed at Rs 275 per quintal.
    This is the highest ever FRP approved for sugarcane farmers, according to the government.
    In the current sugar season 2020-21, close to 2,976 lakh tonnes of sugarcane worth Rs 91,000 crore was purchased by sugar mills, Goyal said, adding that this will likely go up to 3,088 lakh tonnes in the sugarcane season starting October 2021, while the total remittance to the sugarcane farmers will increase to about Rs 1 lakh crore. The government has said farmers will no longer have to wait for years to obtain their outstanding dues.
    The FRP approved shall be applicable for purchase of sugarcane from the farmers in the sugar season 2021-22 (starting w.e.f. October 1, 2021) by sugar mills.
    According to Goyal, out of the Rs 75,845 crores cane dues payable to farmers for the 2019-20 sugarcane season, Rs 75,703 crore has already been paid and only Rs 142 crore arrears are pending. For the current sugar season 2020-21, out of cane dues of Rs 90,959 crores, Rs 86,238 crores have already been paid to the farmers.
    The minister also emphasized that the government is also encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol, with the percentage of ethanol blended in petrol expected to go beyond 20 percent from the current 7.5-8 percent levels, over the next two-three years.
    The FRP on sugarcane was approved based on the recommendation of the Commission for Agricultural Costs and Prices (CACP), and currently translates to farmers receiving 87 percent of the amount on top of their cost of production, Goyal said in the cabinet briefing.
    On the announcement, Abinash Verma, Director General of Indian Sugar Mills Association said the market and the industry were expecting an increase of Rs 5 per quintal of sugarcane in the FRP and that is what has been announced. So, it is not a surprise. "But I will also react by saying and adding to the fact that the government has been very, very responsible in this case, because two years back they did not increase the FRP at all. Last year, they increased the FRP by Rs 10 rupees, and this year, they have increased by Rs 5 per quintal. So, a Rs 15 rupee increase over three years I don't think that is a very big increase the industry should be able to absorb this increase provided a similar increase made in the MSP of sugar at the same time.”
    On payments due to the sugarcane farmers, Verma said this is one aspect that really concerns us. The industry never wants to hold on to the payment to the farmers because it has to go back to the same farmers to get their sugar cane next year. "The arrears should be in the range of almost about Rs 13,000-14,000 crore for the current season. Now, the main reason for the unpaid cane price to the farmers is that our revenue realisation is not as good as we want it to be. There has to be a linkage between the sugar cane price and the sugar price,” he added.
    next story

      Market Movers

      View All