FRP of Rs 290 per quintal approved for sugarcane

The Cabinet Committee on Economic Affairs said in a press release issued on August 25 that keeping in view the interests of sugarcane farmers, it had approved the Fair and Remunerative Price (FRP) of sugarcane for sugar season 2021-22 (October-September) at Rs 290 per quintal. This FRP is for a basic recovery rate of 10 per cent, with a premium of Rs 2.90 per quintal for each 0.1 per cent increase in recovery over and above 10 per cent, and a reduction in FRP by Rs 2.90 per quintal for every 0.1 per cent decrease in recovery.

The FRP has been determined on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultation with State Governments and other stakeholders.

The Government’s proactive approach to protecting the interest of farmers is also seen in the decision of no deduction in the case of sugar mills where recovery is below 9.5 per cent, says the release. Such farmers will get Rs 275.50 per quintal for sugarcane in the ensuing sugar season 2021-22 in place of Rs 270.75 per quintal in the current sugar season 2020-21.

The cost of production of sugarcane for the sugar season 2021-22 is Rs 155 per quintal. This FRP of Rs 290 per quintal is higher by 87.1 per cent over production cost, thereby giving the farmers a return of much more than 50 per cent over their cost.

In the current sugar season, about 2,976 lakh tonnes of sugarcane worth Rs 91,000 crore was purchased by sugar mills, which is an all-time high. Also, it is the second highest, next to the procurement of paddy crop at Minimum Support Price (MSP). Keeping the expected increase in the production of sugarcane in sugar season 2021-22, about 3,088 lakh tonnes of sugarcane is likely to be purchased by sugar mills. The total remittance to the sugarcane farmers will be about Rs 1,00,000 crore. The Government says it will ensure that sugarcane farmers get their dues in time.

The sugar sector is an important agro-based sector that impacts the livelihood of about 5 crore sugarcane farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities including farm labour and transportation.

The press release also speaks about the payments situation. In the previous sugar season 2019-20, about Rs 75,845 crore cane dues were payable, out of which Rs 75,703 crore has been paid and only Rs 142 crore arrears are pending. Even in the current sugar season, out of cane dues payable of Rs 90,959 crore, payments of Rs 86,238 crore have already been made to the farmers. An increase in export and the diversion of sugarcane to ethanol is ensuring timely cane price payments to farmers, says the release.