The Union government has hiked the Fair and Remunerative Price (FRP) of sugarcane to Rs 340 per quintal from the existing Rs 315.10 per quintal, an increase of 8%. The decision was taken in a late night meeting of the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday, February 21. The revised prices will be applicable with effect from October 1, 2024, according to an official statement issued after the meeting. However, the FRP for sugar factories having a recovery rate up to 9.5% will remain the same. Recovery rate is the amount of sugar that sugarcane fetches. The higher the amount of sugar derived from the sugarcane, the greater the price it fetches in the market.
According to a press release, the Union government will provide a premium of Rs 3.32 per quintal for every 0.1% increase for the sugar factories having a recovery rate of more than 10.25%. However, Rs 3.32 per quintal would be deducted if the recovery rate decreases by 0.1%. “With this approval, sugar mills having a recovery rate of 10.25% will pay an FRP of Rs 340 per quintal (to the farmers). Even if sugar recovery is less, farmers are assured of FRP at Rs 315.10 per quintal,” it added.
However, it is to be noted that the Union government had already increased the FRP for sugarcane for the 2023-24 season to Rs 315 per quintal for a basic recovery rate of 10.25% from the earlier Rs 305 per quintal. According to reports, farmers in western Uttar Pradesh, an area which is a major cultivator of sugarcane, had then expressed disappointment with the increase, terming it “totally insignificant.”
Addressing the media post the Cabinet meeting, Information and Broadcasting minister Anurag Thakur said, “at 107% higher than the MSP calculation of A2+FL [referring to the actual and implicit cost of production], the FRP increase will ensure prosperity for farmers.” A2 refers to the costs while producing a particular crop, including that of seeds, fertilisers, labour, machinery, etc; and FL refers to the value of family labour. The Commission for Agricultural Costs and Prices (CACP) uses these inputs to arrive at MSP.
“The decision proves the Modi government’s commitment to ensure that farmers’ wealth is doubled. It should also be remembered that we brought Nano Urea. Over Rs 3 lakh crores worth subsidy was given by the Indian government,” he added.
The Union government’s announcement comes a mere few hours after a protesting farmer died at the Sangrur-Jind border allegedly due to police’s use of tear gas shelling. Farmers, protesting in Delhi and Haryana, have been demanding a legal guarantee for Minimum Support Price (MSP) on all crops.