Fair, remunerative price for sugar cane increased, Pg14

Key Highlights:

• The Cabinet Committee on Economic Affairs (CCEA) approved an increase in the Fair and Remunerative Price (FRP) of sugar cane to ₹355 per quintal for the 2025–26 season (October–September), up from ₹340 in the previous season.

• The FRP is based on a basic recovery rate of 10.25%, with premiums and deductions applicable for variation.

Detailed Insights:

• Premium: ₹3.46 per quintal for every 0.1% increase in recovery above 10.25%.

• Deduction: ₹3.46 per quintal for every 0.1% fall below 10.25%.

• Exception: No deduction for mills where recovery is below 9.5%. Such farmers will still receive ₹329.05 per quintal.

Farmer Impact:

• The cost of production for 2025–26 is ₹173 per quintal, ensuring a margin of over 100%.

• The FRP directly benefits over 5 crore sugarcane farmers and 5 lakh mill workers.

Financial Context:

• In 2023–24, of ₹1.11 lakh crore payable as dues, ₹1.11 lakh crore has already been cleared (99.92%).

• In 2024–25, out of ₹97,270 crore payable, ₹85,094 crore (87%) has been paid so far.

Significance:

• Ensures remunerative pricing to protect farmers’ interest and maintain viability of the sugar industry.

• FRP is a statutory price, unlike MSP (Minimum Support Price), and is binding on sugar mills.

• Reflects Centre’s responsiveness to CACP recommendations and stakeholder consultations.

Mains Mock Question:

"What is the Fair and Remunerative Price (FRP) mechanism for sugarcane in India? How does it differ from MSP? Discuss its role in ensuring farmer welfare and challenges in its implementation."