Cabinet Approves Increase In Sugarcane FRP By Rs 10  For 2020-21
Day laborers load sugarcane into a crushing machine. (Photographer: Dhiraj Singh/Bloomberg)

Cabinet Approves Increase In Sugarcane FRP By Rs 10 For 2020-21


The Centre on Wednesday decided to increase the minimum price sugar mills pay to sugarcane growers by Rs 10 to Rs 285 per quintal for the next marketing year starting October 2020.

The decision to increase the Fair and Remunerative Price of sugarcane for the 2020-21 marketing year was taken in the meeting of the Cabinet Committee on Economic Affairs.

The government had fixed sugarcane FRP at Rs 275 per quintal for the current 2019-20 marketing year.

Also read: India Eases Rules to Aid States Clear $4.3 Billion in Power Dues

"The CCEA has approved the sugarcane FRP for the 2020-21 at Rs 285 per quintal," Information and Broadcasting Minister Prakash Javadekar said in a media briefing.

In a statement, the government said the FRP of Rs 285 per quintal has been fixed for a basic recovery rate of 10%.

However, a premium of Rs 2.85 per quintal will be paid by sugar mills for every 0.1% increase above 10% in the recovery, it said.

Also, the government has made a provision for reduction in FRP by Rs 2.85 per quintal for every 0.1 percentage point decrease in recovery, in respect of those mills whose recovery is below 10% but above 9.5%.

However, for mills having recovery of 9.5% or below, the FRP is fixed at Rs 270.75 per quintal.

Also read: Cabinet Clears National Recruitment Agency To Conduct Common Test For Government Jobs

"The determination of FRP will be in the interest of sugarcane growers keeping in view their entitlement to a fair and remunerative price for their produce," the statement said.

The FRP has been fixed in line with the recommendation of the Commission of Agricultural Costs and Prices, a statutory body that advises the government on the pricing policy for major farm produce.

The FRP, which is determined under Sugarcane (Control) Order, 1966, is the minimum price that sugar mills have to pay to sugarcane farmers.

Also read: Cabinet Approves Proposal For Leasing Out Jaipur, Guwahati And Thiruvananthapuram Airports

Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called 'state advisory prices', which are usually higher than the Centre's FRP.

The government estimates the country's total sugar production to be at 28-29 million tonne in the current year ending next month, compared to 33.1 million tonne during 2018-19, due to sharp fall in cane acreage in Maharashtra and Karnataka.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.