The Union Cabinet has approved a ₹55 per quintal increase in the Fair and Remunerative Price (FRP) of sugarcane for the 2024-25 season. This raises the FRP to ₹340 per quintal for a basic recovery rate of 10%.
For every 0.1% increase in sugar recovery above 10%, farmers will receive an additional ₹3.50 per quintal. This means the FRP can go up to ₹355 per quintal for a 11% recovery rate, and potentially higher depending on actual recovery levels.
The decision aims to boost farmer income and encourage sugarcane production. The increase is based on recommendations from the Commission for Agricultural Costs and Prices (CACP). The government states this move reflects its commitment to the welfare of sugarcane farmers.
This is the highest increase in FRP in recent years. The previous FRP was ₹315 per quintal. The new FRP applies to sugarcane used for producing white sugar.
The financial implication of this decision is estimated to be around ₹19,500 crore annually. The government emphasizes that this will not impact consumers as the increase is borne by sugar mills.
The move comes ahead of the upcoming sugarcane crushing season and is expected to alleviate concerns among farmers regarding profitability. It also addresses demands from farmer organizations for a higher FRP to account for rising input costs.
The government also approved a continuation of the sugar subsidy scheme to support the export of sugar, ensuring continued demand and stable prices. This subsidy will help mills clear sugarcane dues to farmers promptly. The overall goal is to maintain a balance between farmer interests, sugar mill viability, and consumer affordability.
