NEW DELHI: The Union Cabinet approved an increase in the Fair and Remunerative Price (FRP) on sugarcane to Rs 290 per quintal based on a 10 per cent recovery, informed Union Consumer Affairs and Food and Public Distribution Minister Piyush Goyal on Wednesday.

Briefing the media on Cabinet decisions here today, Goyal said, “The Union Cabinet has decided that the Fair and Remunerative Price (FRP) which is paid on sugarcane will be increased to Rs 290 per quintal which will be based on a 10 per cent recovery. When the recovery increases beyond 10 per cent, then on every point 1 per cent rise, additional Rs 2.90 is paid per quintal. Even if a farmer has less than 9.5 per cent recovery, their Fair and Remunerative Price (FRP) will be Rs 275 per quintal.”

The Centre had in August 2020 increased the FRP by Rs 10, bringing the amount to Rs 285 per quintal. In 2019-2020, the government had fixed Sugarcane FRP at Rs 275 per quintal.

He further said, “Many farmers across the country have increased their recovery by using modern technology, implementing new practices on a large scale. We have been observing that the recovery in our country is improving.”

“Also last year, export was also at a record high. Our country has entered contracts of exporting 70 lakh tonnes of sugarcane, out of which 55 lakh tonnes has already been exported and the remaining 15 lakh tonnes is in the pipeline,” added the Union Minister.

With the amendment of the Sugarcane (Control) Order, 1966 on October 22, 2009, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the ‘Fair and Remunerative Price (FRP)’ of sugarcane for 2009-10 and subsequent sugar seasons.

Under the FRP system, the farmers are not required to wait till the end of the season or for any announcement of the profits by sugar mills or the Government. The new system also assures margins on account of profit and risk to farmers, irrespective of the fact whether sugar mills generate profit or not and is not dependent on the performance of any individual sugar mill, according to the Ministry of Consumer Affairs, Food and Public Distribution

In order to ensure that higher sugar recoveries are adequately rewarded and considering variations amongst sugar mills, the FRP is linked to a basic recovery rate of sugar, with a premium payable to farmers for higher recoveries of sugar from sugarcane.