FRP of sugarcane hiked by Rs 25, but due to low recovery farmers may not get benefit
The increase in FRP of sugarcane by the Central Government is being termed as a big gift for the farmers. Actually it is not so. There are two reasons for this. First, according to the sugar industry, the average sugar recovery in sugarcane in the current season is 9.79 percent. If the recovery is less than 10.25 percent, then the FRP will be reduced at the same rate. In case sugar recovery is 9.5 percent or less, sugarcane farmers will get FRP of Rs 315.10 per quintal
The Central Government has increased the Fair and Remunerative Price (FRP) of sugarcane from Rs 315 to Rs 340 per quintal. The Cabinet Committee on Economic Affairs has increased the FRP of sugarcane by Rs 25 per quintal i.e. about 8 percent for the sugar season 2024-25. The increase has been approved.
The FRP of sugarcane has been fixed for the season from October 2024 to September 2025 on the basis of 10.25 percent recovery of sugar. In other words, if sugar recovery is less than 10.25 percent then the rate of sugarcane will decrease.
The increase in FRP of sugarcane by the Central Government is being termed as a big gift for the farmers. Actually it is not so. There are two reasons for this.
First, according to the sugar industry, the average sugar recovery in sugarcane in the current season is 9.79 percent.
In this situation, it is difficult for the full benefit of increase in FRP of sugarcane to reach the farmers. If sugar recovery is more than 10.25 per cent, FRP will increase by Rs 3.32 per quintal for every 0.1 per cent recovery.
At the same time, if the recovery is less than 10.25 percent, then the FRP will be reduced at the same rate. In case sugar recovery is 9.5 percent or less, sugarcane farmers will get FRP of Rs 315.10 per quintal.
If we look at the latest figures of sugar recovery, there are no conditions for sugarcane farmers in the country to get FRP of Rs 340.
The national average of sugar recovery in sugarcane so far in the 2023-24 season is 9.79 percent. The recovery level ranges between 8.10 percent to 10.50 percent in different states. The recovery in all major sugar producing states is 10.05 to 8.10 percent.
The recovery rate in the country's largest sugar producing state Uttar Pradesh is 10.05 percent, while in the second largest sugar producing state Maharashtra, the recovery rate is 9.6 percent.
Till a few years ago, sugar recovery of 9.50 percent was considered the basis for fixing FRP. But for determining FRP, sugar recovery was increased to 10.25 percent in a phased manner.
Actually sugar producing states can be divided into two catagories. One is the state where the price of sugarcane is available on the basis of FRP and the other is the state where sugarcane price is paid to the farmers on the basis of State Advisory Price (SAP).
The second reason is in the states of Punjab, Haryana, UP and Uttarakhand, which are affected by the past and present farmer movements, the price of sugarcane is given to the farmers on the basis of State Advisory Price i.e. SAP instead of FRP.
There is no basis for recovery in this, rather the price will be decided on the basis of early and common variety. Accordingly, the increase in FRP made by the Centre will not have a direct impact on the sugarcane farmers of UP, Haryana, Punjab and Uttarakhand. Nor does it have any special importance for them.
In the current season, the SAP of early variety sugarcane is Rs 370 per quintal in Uttar Pradesh, Rs 375 per quintal in Uttarakhand, Rs 384 per quintal in Haryana, while the SAP of sugarcane in Punjab has been declared at Rs 391.
In such a situation, sugarcane farmers here are already getting higher prices than the FRP fixed for the next season. And that too despite the sugar recovery being less than the target for FRP. In such a situation, it is difficult to say whether the announcement of fresh FRP will have any direct impact on the farmers of these states.
The overall situation is that in the states where payment for sugarcane is made on the basis of FRP, they will not get full benefit due to low recovery rate, whereas in major sugarcane producing states like UP, farmers are given the price of sugarcane not on the basis of FRP but on the basis of SAP.
According to the government release, the FRP of sugarcane by the Central Government is 107 percent more than the cost (A2+FL). This will ensure prosperity of sugarcane farmers.
India is already paying the highest price for sugarcane in the world but despite this the government is providing the world's cheapest sugar to Indian domestic consumers.
The government claims that this decision of the Central Government will benefit more than 5 crore sugarcane farmers (including family members) and lakhs of other people associated with the sugar sector.
