CCEA Approves Fair and Remunerative Price of Sugarcane For Season 2024-25

GS Paper III Indian Economy

Context:

The Cabinet Committee on Economic Affairs (CCEA) approved the Fair and Remunerative Price (FRP) of sugarcane for Sugar Season 2024-25.

The FRP of sugarcane was raised by 8 per cent to Rs 340 per quintal for Sugar Season 2024-25 (October-September) from the existing Rs 315 per quintal.

Fair and remunerative price (FRP): It is the minimum price at which sugarcane is to be purchased by sugar mills from farmers.
Criteria of Determination: The prices are determined based on the quantity and sugar recovery rate from the canes.
- Sugar Recovery Rate indicates the sugar production from per metric ton of sugarcane.

About Sugarcane Crop:

Sugarcane is a giant tropical grass from the family Graminaceae, whose stalk has the particular capacity to store a crystallizable sugar, sucrose.
It is the main source of sugar, Gur (jaggery), khandsari and molasses.
Top Sugarcane Producing States: Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Bihar.
Suitable Conditions for sugarcane Production:
- Temperature: Between 21-27°C with hot and humid climate.
- Rainfall: Around 75-100 cm.
- Soil Type: Deep rich loamy soil.
In 2021-2022, India surpassed Brazil to become the world’s largest sugar producer, reaching an all-time high production of 359 lakh tonnes.

FRP Determining Body: The FRP is fixed by the Union government (CCEA) on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).
Committee: The FRP is based on the recommendations of the Rangarajan Committee report on reorganising the sugarcane industry.
Statutory Provision: The pricing of sugarcane is governed by the statutory provisions of the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act (ECA), 1955.
Methodology: Recommended FRP is arrived at by taking into account various factors such as cost of production, demand-supply situation, domestic & international prices, inter-crop price parity etc.
State Advised Prices (SAP): The State Government of key sugarcane-producing states announces the State Advised Prices (SAP).
- SAP is generally higher than the FRP set by the Central Government.

Doubling of Farmer’s Income: An increase in FRP would directly benefit more than 5 crore sugarcane farmers (including family members) and lakhs of other persons involved in the sugar sector in doubling their income.
Increased Margin to Farmers: FRP assures margins to farmers, irrespective of whether sugar mills generate a profit or not.
Nationwide Implementation of FRP and State-Advised Prices: The FRP would be implemented nationwide. Additionally, states like Punjab, Haryana, Uttarakhand, Uttar Pradesh, and Tamil Nadu set a State Advised Price, usually above the FRP.

Also Read: Farmers Protest 2.0: Are Farmers Demands Unjustified?

News Source: PIB

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