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

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.

FRP: Fair and Remunerative Price

• 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.

• 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.

Significance of Increased FRP

• 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.

News Source: PIB

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